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PAYBACK TIME FOR HCI SHAREHOLDERS

08 May General

Johannesburg – Hosken Consolidated Investments (HCI), the empowerment investment company, said yesterday that it would effect the biggest empowerment payback in South African history, culminating in the distribution of R1,5 billion to shareholders. This follows the disposal of Datatec shares for about R650 million last week and the unbundling yesterday of Softline shares for R545 million. Marcel Golding, the chairman of HCI, said R750 million would go to the South African Clothing and Textile Workers’ Union and Mineworker Investment Trusts. He said the share transactions with Datatec and Softline were not disposals, but rather distributing value back to shareholders: “HCI will still have substantial interests through its union investments. We went into Softline and were able to create significant value, but our portfolio had become skewed. As an investment company, we wanted to invest more with unlisted companies.” Despite HCI’s reports stating last year that it would increase its stake in Datatec this year, Golding said Datatec was growing too fast: “It is essentially a global company now, and with our decreasing stake our status as an empowerment partner was diminished. Datatec is an excellent company and the selling off of the shares was in no way due to negative sentiment.” Reports had said HCI sold Datatec equity in order to settle debts. Golding said HCI had now cleared up all outstanding debts and had R120 million in the bank. To keep Softline’s share price stable, Ivan Epstein, the chief executive, and Steven Cohen, chief financial officer, formed a consortium to take up shares. The company was confident its stock would not be unduly affected by the transaction. Market reaction to the Softline announcement was positive for HCI yesterday and its shares gained 65c to close at R6,50. Volumes were fair and the share achieved a high of R7,10 during morning trade. Golding said: “The market reacted favourably because we have always clearly stated our intentions and indicated our position. We have also proved that we can make an investment, go into a company and add value, and then return that value to the shareholder.” HCI’s remaining information technology-related interests lie with Vodacom, but Golding did not indicate any further transactions. Datatec ended the day R2,50 weaker at R92. Softline gained 20c to R7,90.

Source: Business Report – Renée Bonorchis