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Johannesburg - Empowerment investment holding firm Vunani has secured more than R300m to restructure its potentially paralyzing debt.
This follows protracted negotiations with funders of the AltX-listed company since early 2008.
"It's taken us a while to get to this stage," Vunani CE Ethan Dube told Fin24.com on Wednesday.
Vunani said early this year that it was in "breach of some of the debt covenants" with funders because of lower asset valuations following 2008's market crisis.
"We were never in breach of the debt, but the asset prices fell below the cover required by our funders," said Dube. The assets are mainly minority stakes in listed companies, including BSI, Alert Steel, Esor, Interwaste, Workforce Holdings, Peregrine Holdings and the JSE.
Although the company reported a R81.8m operating profit in the year to December, Vunani suffered a R758m net loss, as it had to revalue its listed assets.
Vunani is pressing ahead with a R325m recapitalisation that would see 3.2bn new shares issued to Vunani's existing shareholders at the prevailing market price of 10c.
The Vunani Group, which holds 63.4% in Vunani Limited, has agreed to underwrite the rights offer to the tune of R313.6m, which will be used to settle the pressing debt.
The management of Vunani Limited, the listed entity, owns the Vunani Group, while Absa Bank is the second-largest shareholder with 20%.
Dube wouldn't go into detail about the exact amount of the debt and which institutions were owed money.
However, Fin24.com has it on good authority that Standard Bank and Investec Bank are the company's biggest creditors. Fin24.com also understands the overall debt figure to be in the region of R600m.
Dube says his company is now comfortable with its asset base and it is not being pressurised into offloading any assets.
"Now that we've got this behind us, we'll continue to do what we know we do best: to concentrate on building a strong operating and investment company,"said Dube.
- Fin24.com
