Clock ticks for KWV shareholders

Cape Town - KWV shareholders who are not interested in taking advantage of the rights issue and increasing their shareholding in the company have only until Friday to sell their rights. After that they lose R1.41 per right earmarked for them.

KWV chairperson Thys du Toit says it seems that certain smaller shareholders do not realise they can make money by selling their rights if they don't want to take up the shares allocated to them.

There are about 3 700 small shareholders, mainly wine farmers, who have a stake in KWV and qualify for the rights issue.

KWV's recent restructuring took place under the banner of unlocking value for shareholders. KWV unbundled its stake in KWV Holdings, which led to the establishment of Capevin Holdings and KWV Holdings.

Because KWV Holdings in future has to operate without the income it previously earned from Distell dividends, the decision was taken to generate capital for KWV Holdings through a rights issue.

A shareholder who owned 10 000 KWV shares at a price of R3.80 per share before the restructuring, had a stake worth R38 000. After the restructuring the same shareholder will have 10 000 Capevin Holdings shares (at R3.25 per share, worth R32 500) as well as 1 000 KWV Holdings shares (at R7.50, worth R7 500).

If the individual decides to sell his 540 rights and submits the necessary documents, a further R761 will be earned, bringing the value of his stake to R40 761, with the future prospect of earning dividends from the investment in two companies.

Du Toit says the real unlocking of value at KWV has taken place over a long period and began when KWV was converted from a co-operative into a company, with an initial 40c share price.

With all the subsequent developments, the share price has risen to about R4.20. The net asset value is currently calculated at R24 per share.

- Sake24.com

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