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Johannesburg - Despite the uncertainty in equity markets, the JSE on Tuesday was a hive of activity with two listings and a presentation to lure more unlisted firms onto the bourse taking place.
The marketing department held its monthly breakfast presentation for directors of unlisted companies, with a view to explaining how they can float their companies on the exchange.
But on the ground and the ninth floors, JSE executives had their hands full with two main board listings that collectively raised R600m.
Coal miner Keaton Energy raised R100m in a private listing while food producer Pioneer Foods issued extra shares in a R500m rights offer to its existing shareholders and transferred its listing from over-the-counter (OTC) trading to the JSE's main board.
Keaton, which is currently active in the Mpumalanga province, had by 10:30 traded 900 000 shares at between 1 280c and 1 341c/share - all higher than the 1 000c/share placement.
In comparison, Pioneer Foods saw thin trading, with close on 19 000 shares changing hands at between 3 275c and 3 600c/share. The opening price of 3 275c was 25c higher than its last trade on the OTC market.
Expansion
Pioneer CE Andre Hanekom said the R500m raised would be put to capital expansion projects to increase manufacturing capacity in the milling, baking, cereals and beverages divisions.
"We've grown so much over the past three years that we need one to two billion rand to expand," said Hanekom.
He said between R700m and R800m would be utilised in the current financial year while the balance would be raised and utilised in the next financial year, which starts in October.
A large chunk of the money can be expected to be spent on the staple foods division, which generates about 70% of revenue and operating profit.
Price-fixing
This is also the division that is currently the subject of a competition commission investigation into bread price-fixing.
The commission has already fined Tiger Brands nearly R100m for its part in the price-fixing saga. It has been investigating Pioneer for over a year now, but Hanekom said his company is still waiting for the formal charges and accusations.
Said Hanekom: "We have no idea when the referral (formal charges) will come. We'll wait for the referral and act accordingly."
He wouldn't be drawn on whether the company would be seeking a settlement with the commission, saying that could only be decided upon once it knows what charges it is facing.
"We don't want to prejudge the legal process," said Hanekom when asked if the company is guilty. "We have a legal opinion we are very comfortable with. We are waiting for them (commission) to press charges."
In the Western Cape, said Hanekom, Pioneer did receive the charges. The company filed its answering affidavit and approached the commission with a view to a settlement but no agreement was reached.
"We couldn't reach common ground with them; there was no agreement that made sense to us," said Hanekom. He said the company couldn't settle because it has not been found guilty of anything.
"With the information we have, we are very comfortable with our stand."
- Fin24.com