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Cape Town - Empowerment group Sekunjalo Investments, which has recently lagged its larger compatriots in terms of deal flow, now looks ready to move and shake.
On Wednesday - as speculated earlier in Finweek (Support and Speculation, October 2) - Sekunjalo announced the acquisition of a strategic stake in the SA arm of UK-based telecommunications giant BT.
According to a stock exchange news service announcement on Wednesday, Sekunjalo has acquired 30% of BTSA for R27m.
Although BT is a major global telecoms player providing 170 countries with networked IT and telecommunications services, the company is not well known in SA.
While the 30% investment puts an inferred value of only R90m on BTSA, Sekunjalo CE MO Kajee stresses the deal was not about price but rather potential.
Kajee pointed out that BTSA, established in SA 16 years ago, provided an array of global services to multinationals in SA. "BTSA are hoping to double their revenues to $200m next year."
While not too much financial information on BTSA was provided, the market seemed to like the deal with Sekunjalo's shares edging up to 62c in fair volumes.
Siemens stake
Naturally, strong empowerment credentials are needed if BTSA intends expanding its service offering in SA. Kajee pointed out that Sekunjalo's foothold in the public sector could prove advantageous to BTSA.
He said the deal formed part of Sekunjalo's stated intention of securing stakes and partnerships with major blue-chip and multinational companies. "We want to target the larger companies more aggressively now."
The BTSA deal is also an interesting move, considering that unlisted "parent" company Sekunjalo Investment Holdings owns a strategic stake in telecommunications group Siemens SA.
There has been talk that the valuable SIH stake in Siemens could be transferred into Sekunjalo. Kajee declined to be drawn on the Siemens matter.
Sekunjalo also renewed its cautionary notice, which referred to negotiations separate from the BTSA transaction.
Finweek hears the cautionary may relate to developments at Sekunjalo's fishing subsidiary, Premier Fishing. Directors have hinted that Premier Fishing could look at consolidation opportunities with smaller fishing groups.
- Fin24.com