Brimstone buys 25% stake in Lenco
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Senior Business Correspondent
WESTERN Cape-based, blackcontrolled investment group Brimstone has bought 25% of packaging company Lenco Holdings for R51,2m from international risk capital investor Commonwealth Development Corporation (CDC), Brimstone CEO Mustaq Brey said yesterday.
The deal was crucial and was expected to have a huge effect on the group's earnings in its next reporting period.
According to Brey, the group's interim results to June this year, would have seen an earnings increase of 18,9% to 8,8c a share had the acquisition been effected on January 1.
After the Brimstone acquisition, CDC, which bought Lenco from the De Jager Trust in April, would retain 58,4% of Lenco, and the balance of 16,6% to be held by Lenco's executive management.
As part of the deal, Brimstone would acquire 2501 ordinary shares for R8,1m and R43,2m in shareholder loans.
Brey said the acquisition was in line with Brimstone's philosophy of adding value to strategic investments in the industrial and financial services sectors.
"We are of the opinion that Lenco is extremely well positioned to deliver sustainable returns to our shareholders in the long term.
"Further, the acquisition will significantly enhance Lenco's empowerment profile and will provide a stimulus to growth in the markets within which its subsidiaries operate," he said.
Cadbury's former MD, Owen Gowar, has been appointed CEO of Lenco, and Brimstone would second two people to the Lenco board. Gower said the company was delighted that through the deal both parties managed to retain the core of 12 of the senior management of the organisation, who brought a lot of experience and energy to the new business.
"We will continue to focus on opportunities as identified, and to build on a sound footing to the benefit of all stakeholders."
Nov 04 2003 07:31:16:000AM Patrick Wadula Business Day 1st Edition
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