- January 14, 2001
- Posted by: admin
- Category: General
The Mineworkers’ Investment Company (MIC), the investment arm of the National Union of Mineworkers, is set to break its five-year relationship with Hosken Consolidated Investments (HCI). MIC, which together with the SA Clothing and Textile Workers’ Union Investment Company jointly controls HCI, is understood to be on the verge of cutting ties with HCI in an asset swap transaction, bringing to an end its decade-old relationship with Sactwu Investments, according to sources close to the three organisations. MIC owns 20% of HCI and Sactwu 30%. The MIC stake is worth about R370-million at current market prices. Sactwu Investments has pre-emptive rights over the MIC stake. MIC declined to comment, as did Marcel Golding, chairman of HCI, as HCI is under a cautionary. Analysts were baffled by the cautionary with many suggesting that HCI, which trades at a discount to net asset value, was looking at unlocking value. The deal will allow MIC to consolidate its media interests, particularly in radio. MIC jointly controls Primedia. Primedia owns Radio 702 and, together with HCI, through Africa On Air, controls Cape Talk and Highveld Stereo. HCI has 51% and Primedia 40% of Africa On Air. HCI also has control of the fledgling but troubled e.tv as well as a stake in Y-FM. The deal could see MIC take control of HCI’s radio assets. It is expected that the transaction will not include a change in the ownership of e.tv, although Primedia is known to have expressed an interest. This transaction is expected to be finalised in the next two weeks and will bring an end to a once-strong working relationship between the two union investment companies. Both MIC and Sactwu were the pioneers of union investment companies when, in the early ’90s, Marcel Golding and Johnny Copelyn helped form MIC and Sactwu respectively. Initially both worked together. For instance, in 1996 both MIC and Sactwu bought control of HCI, reverse-listing into the company by injecting R500-million worth of assets, including a 5% stake in Vodacom. However, differing management styles and strategies have seen the two union investment companies drift steadily apart. The extent of the fall-out became apparent when Golding resigned from the MIC board in 1999. Recently, MIC removed two of its board representatives from the HCI board.
Source: Sunday Times – Labour Investment – Thabo Kobokoane