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HCI RIDES TO THE RESCUE WITH R200m

HCI rides to the rescue with R200m

Hosken Consolidated Investments (HCI), which plans to take control of Seardel with a R200 million capatila injection via a rights issue, is confident it can patch up the ailing clothing and textile maker.

“The primary reason for all HCI’s investments is commercial gain,” HCI chief executive Johnny Copelyn said yesterday.

“We believe we can fix this company … [although] it’s not a quick gain.”

He acknowledged that the commitment to remedy Seardel’s problems was probably in part because of the long association of many HCI directors with unions in the clothing sector, particularly the Southern African Clothing and Textile Workers’ Union (Sactwu).

Copelyn and former trade unionist Marcel Golding formed the investment holding firm in 1997 by transferring union- owned assets into the HCI shell. Sactwu owns about 40 percent of HCI via its investment arm and an educational trust.

Copelyn, the general secretary of Sactwu from 1973 until 1994, barring a five-year break when he was banned, said HCI was more positive about the industry than other investors.

“The reason people are so negative is because they think it’s impossible to compete with China. While acknowledging all the difficulties, we think if the factories are made more efficient — depending on the rand and China’s exchange rate — we can compete.”

HCI planned to retain Seardel’s focus on clothing and textiles. It had no intention of stripping the company’s assets, restructuring or closing plants.

“We intend to make it produce at more efficient prices, tighten up and eliminate loose expenditure,” said Copelyn.

Source: Business Report – Ingi Salgado