In line with its ambition to continually release value to shareholders, Hosken Consolidated Investments is further restructuring its diverse portfolio.

The company recently announced it would list Montauk Energy, a renewable energy company based in the US, by listing its operating entity HCI International on the JSE later this year.

This will be HCI’s third corporate action in less than a year. Last year saw the separate listing of Niveus Investments, which holds its non-casino gaming assets Vukani and Galaxy Bingo, as well as its holdings in liquor company KWV.

Before that HCI reversed its media holdings into Seardel. The aim of that transaction was to give the market more direct access to e.tv, e.tv Africa and other media assets of the group.

“The transactions reflect the company’s efforts to allow a more transparent view of the value underlying the HCI share,” says Chris Logan of Opportunaté Investments. “A listing is one of the best ways to crystalise value.”

Montauk focuses on the capture of methane gas from landfills. While HCI is yet to release a detailed prospectus, the reality is that the discovery of vast shale gas reserves in the US have depressed the gas price and affected profitability at Montauk.

In the last financial year reve-nues fell from R257m to R237.3m. However, losses improved from R74m to R62m.

These losses need to be seen in context, says De Wet Schutte, equity analyst with Avior Research. “Montauk has never shown a profit on an accounting basis. It takes a lot of write downs.”

Source: The Citizen – Sasha Planting