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Johannesburg - Diversified investment group AfroCentric (ACT), through director Motty Sacks, has described the acquisition of an interest in Jasco Electronics as "identifying an enterprise likely to outperform the market".
This acquisition was backed by shareholders, who gave the board a 100% vote in favour of the resolution to acquire 34.9% of the shares in Jasco at 325c/share in a meeting held in Sandton on Monday morning.
The purchase price of the Jasco shares will be satisfied by the issue of ACT shares to the vendors at 260c/ACT share.
"We look at companies in need of black economic empowerment (BEE) and in which we can add value. Jasco presents ACT with such an opportunity," said Sacks.
In explaining the deal Sacks said: "AfroCentric also facilitated the ability for Jasco to by a 34% interest in Malesela Taihan Electric Cable (M-Tec) by investing R100m through a preference share structure in a Jasco wholly owned subsidiary, Iningi Investments, the acquirer of the M-Tec."
M-Tec is a subsidiary of the Korean company, Taihan Electric Wire Company, a world leader in cable manufacturing and, particularly, fibre-optic cables.
The acquisition of an economic interest in M-Tec allows Jasco to gain entry and exposure to the very lucrative cable market in South Africa and allows Jasco to benefit from the current and expected infrastructure spend in South Africa and on the rest of the African continent.
M-Tec posted more than R1bn in turnover in 2007.
Shareholders wanted to know of ACT's plans going forward and when they could expect a dividend flowing from ACT enterprises.
Sacks commented that while ACT is presently on a path of growth and acquisition, dividends will depend on the group's performance and will be considered by the board from time to time.
Sacks said: "Our involvement with Rio Tinto Mining in prospecting and exploration are by nature long-term projects, but the board is cautiously confident that significant value could evolve through these projects in due course."
With SAB's Meyer Kahn and Bidvest's Brian Joffe together with Sacks (Netcare's outgoing chairperson) leading AfroCentric, it is no coincidence that shareholders expect a lot from the company.
"Meyer, Brian and I only hold approximately 15% of the ordinary shares in the company before the dilution arising through the Jasco transaction. Our interest is to grow the value of the company substantially for the benefit of our shareholders who are substantially broad-based black economic empowerment entities.
"The investment landscape is somewhat challenging at the moment, but it is also a time where attractive investment opportunities present themselves," said Sacks.
- Fin24.com