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Cape Town - Remgro, the Stellenbosch-based investment trust, has received its first dividends from its investment in undersea cable business, Seacom.
According to a Remgro presentation document released on Monday, Seacom paid a $6m (R45m) dividend in the fourth quarter of 2009.
Remgro holds a 25% stake in Seacom. The Seacom stake was initially held in corporate cousin Venfin, which was recently merged with Remgro.
The Seacom dividends were, however, not included in Remgro's interim results to end September 2009 as the merger with Venfin was only concluded last month.
At the end of August this year, Venfin had invested about $75m (R560m) in Seacom.
Seacom provides the first high-capacity undersea fibre optic cable connecting southern and East Africa to landing points in France and India.
Seacom went commercially "live" in July 2009.
Remgro reported that Seacom's sales were ahead of expectation - albeit with some cost overruns.
Remgro also indicated that landlocked countries like Uganda, Rwanda, and Ethiopia would be connected by terrestrial backhaul and that other branch connections were under consideration.
Remgro values its 25% stake in Seacom at R1.16bn, which gives Seacom an inferred enterprise value of around R4.5bn.
Venfin CEO Jannie Durand recently told Fin24.com that the Seacom valuation was based on discounted future cash flows.
The $6m dividend certainly suggests the early operational cash flows from Seacom are encouraging.
- Fin24.com