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No plans yet for PSG’s R200m

May 14 2010 15:45 Marc Hasenfuss

Company Data

Psg1 [JSE : PSG]

Last traded R48.05
Change R-0.65
% Change -1.33%
Cumulative volume 39,537
Market cap R9.74bn

Last Updated: 03/02/2012 at 19:33. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - It seems that not too much should be read into Stellenbosch-based investment group PSG's announcement on Thursday that it had raised R200m in fresh capital through an issue of new preference shares.

Initial reaction from some market watchers was that PSG [JSE:PSG] could be sizing up a new opportunity, while a share chat site even suggested PSG was keen to up its stake in Capitec Bank.

In a week in which rumours swirled around the JSE (think Standard Chartered and Wal-Mart), an excitable reaction was not entirely unexpected.

Officially PSG - via wholly-owned PSG Financial Services - issued a little over 2.3 million “cumulative, non-redeemable, non-participating prime-linked preference shares” at an effective yield of 8.9%.

That means the new preference shares were issued at about 8 950 cents per share.

The preference share issue was quite surprising, since PSG's results for the year to end-February 2010 showed a well-reinforced balance sheet. 

Figures for the period showed assets comfortably covering liabilities by about R5.2bn. Even if intangible assets were stripped out, the surplus in total assets was still a reassuring R4.5bn.

As liquid funds go, PSG held about R360m in the bank and another R138m under “receivables”, compared with “payables and provisions of R358m” and another R75m in deferred tax.

A source at PSG stressed the R200m was not raised for a specific transaction. "We thought it was an appropriate time to raise capital through this type of funding, which has no specific repayment terms."

Gareth Stobie, a Grindrod Bank Fund Managers preference share expert, pointed out it was an opportune time for PSG to undertake a new preference share issue.

He pointed out PSG's preference shares had shifted from a low of 7 750c in September last year to around 9 000c currently.

"I think it's been well done, and it is quite a good time be issuing new paper to the market."

 - Fin24.com

 
 
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