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Johannesburg - Empowerment group Brimstone Investment Corporation [JSE:BRT], fresh from unbundling and selling off a large chunk of its investment in Life Healthcare Group [JSE:LHG], intends making the most of its deleveraged balance sheet.
At the release of half-year to end-June results on Wednesday, Brimstone CEO Mustaq Brey told Fin24.com group debt levels had been reduced by about R1bn following the Life Healthcare transactions. He said the group was actively looking for new deals and opportunities that could be added to existing investments.
"We are on the look out for quality assets with good cash flows. For us, strong cash flows are essential."
Brey said Brimstone was focused on continuing to build the intrinsic value of Brimstone. "We are creating centres of excellence in the food and financial services sectors, and have recently bolstered our professional team in order to continue on our growth path and to capitalise on new investment opportunities."
Following the unbundling and sale of most of its stake in Life Healthcare, Brimstone now holds controlling stakes in fishing group Sea Harvest and short-term insurance group Lion of Africa, as well as retaining a valuable 5.5% stake in Life Healthcare as its anchor investments.
The group also holds strategic stakes in fashion retailer Rex Trueform and fishing group Oceana, 100% of clothing manufacturer House of Monatic and options in Old Mutual and Nedbank.
Brey said the decision to unbundle the stake in Life Healthcare was a way for shareholders to cash in some of their investment without reducing their Brimstone holdings. "Quite a lot of our shareholders are emotionally attached to Brimstone. They don’t want to sell their shares."
Brey said Life the Healthcare transaction was a major milestone for Brimstone during the last six months.
He pointed out that in 2005 Brimstone's original investment in this business was R100m and on listing, the group achieved a capital investment rate of return in excess of 85%. "We continue to maintain a stake in the business as we believe in the long-term growth prospects of the company."
Most of Brimstone's investments - save for the special purpose vehicle attached to a stake in fishing group Oceana - are now fully paid up.
Brimstone's net asset value as at the end of June 2010, stripping out the now unbundled Life Healthcare portion, was R1.5bn or 623 cents per share.
- Fin24.com
At the release of half-year to end-June results on Wednesday, Brimstone CEO Mustaq Brey told Fin24.com group debt levels had been reduced by about R1bn following the Life Healthcare transactions. He said the group was actively looking for new deals and opportunities that could be added to existing investments.
"We are on the look out for quality assets with good cash flows. For us, strong cash flows are essential."
Brey said Brimstone was focused on continuing to build the intrinsic value of Brimstone. "We are creating centres of excellence in the food and financial services sectors, and have recently bolstered our professional team in order to continue on our growth path and to capitalise on new investment opportunities."
Following the unbundling and sale of most of its stake in Life Healthcare, Brimstone now holds controlling stakes in fishing group Sea Harvest and short-term insurance group Lion of Africa, as well as retaining a valuable 5.5% stake in Life Healthcare as its anchor investments.
The group also holds strategic stakes in fashion retailer Rex Trueform and fishing group Oceana, 100% of clothing manufacturer House of Monatic and options in Old Mutual and Nedbank.
Brey said the decision to unbundle the stake in Life Healthcare was a way for shareholders to cash in some of their investment without reducing their Brimstone holdings. "Quite a lot of our shareholders are emotionally attached to Brimstone. They don’t want to sell their shares."
Brey said Life the Healthcare transaction was a major milestone for Brimstone during the last six months.
He pointed out that in 2005 Brimstone's original investment in this business was R100m and on listing, the group achieved a capital investment rate of return in excess of 85%. "We continue to maintain a stake in the business as we believe in the long-term growth prospects of the company."
Most of Brimstone's investments - save for the special purpose vehicle attached to a stake in fishing group Oceana - are now fully paid up.
Brimstone's net asset value as at the end of June 2010, stripping out the now unbundled Life Healthcare portion, was R1.5bn or 623 cents per share.
- Fin24.com
