La Concorde Holdings, the unlisted company formerly known as KWV Holdings, will probably present proposals for the acquisition of a new operating asset within three months.

KWV sold its core liquor assets in 2016 to a company headed by entrepreneur Viv Imerman, leaving property and art assets and hefty cash proceeds in the newly constituted La Concorde.

La Concorde’s controlling shareholder is listed investment company Niveus, which is in turn controlled by empowerment behemoth Hosken Consolidated Investments (HCI).

Speaking at La Concorde’s annual general meeting on Friday, HCI chairman Johnny Copelyn said the firm would probably be split into two entities, one housing the legacy assets (property and art worth about R202m and R42m respectively) and the other holding cash and promissory notes worth more than R1.2bn.

Copelyn said the new operating asset would be added to the second entity. He did not reveal the identity of the assets being contemplated for a deal at La Concorde, but rumours have swirled that HCI’s coal interests have been earmarked.

Most of HCI’s investments are already listed on the JSE, the exceptions being the coal assets (which are profitable), bus company Golden Arrow and the company’s fledgling gas and oil exploration interests.

Finding new operating assets is important as cash-flush La Concorde could soon become the only asset owned by Niveus. Niveus is in the throes of selling its alternative gaming assets to HCI-controlled gaming and hotels group Tsogo Sun.

Copelyn stressed that HCI would make an offer to any La Concorde shareholder who did not want to participate in the new operational direction. “If you don’t want to be part of the future [of La Concorde], we will buy your shares.”

La Concorde shareholders would need to decide between a meaningful exit from La Concorde or meaningful participation in a new business, he said.

Some La Concorde minority shareholders seem to favour a distribution of the cash proceeds and sale of remaining assets. La Concorde has already committed to paying a 50c per share ordinary dividend and 50c per share special dividend following the sale of the KWV assets.

Copelyn said La Concorde’s cash would not be available to shareholders. “Everyone is impatient … we need to find a sensible asset to introduce into La Concorde. Within three months we’ll get back to you with proposals.”

Shareholders needed to imagine what La Concorde might look like in 10 years, he said. “We are not interested in the moans and groans of people who want to put cash in their pocket and walk away….”

An asset manager who asked not to be named said the La Concorde/KWV saga was a difficult issue for shareholders.

“Some shareholders have waited a long time for the huge underlying value at the old KWV to be recognised. The keenness to realise this value is quite understandable. On the other hand, HCI have a remarkable record of creating value for shareholders over the last two decades. So would it really be a terrible option to go along for the ride at La Concorde?”

Source: Business Day – Marc Hasenfuss