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Cape Town - Zeder Investments, the PSG-controlled agri-business investor, believes the changes made at Paarl-based liquor group KWV Holdings will ensure the company yields a satisfactory return on assets in future.
Zeder is the biggest single shareholder in KWV Limited, which recently split into two separate companies. KWV Holdings retained the operational entities, while Capevin Holdings held onto KWV's significant minority stake in Stellenbosch-based liquor group Distell.
Commenting on Zeder's interim results, CEO Antonie Jacobs said the inconsistent performance of KWV's own operational business and some corporate excesses necessitated a more business-like approach.
"Zeder as a large shareholder opted to act in the best interest of all shareholders and drove the split of KWV's own business from the Distell investment."
The interim results showed that Zeder pushed its portfolio value to R1.85bn at the end of interim period ending August 2009.
This represents a 9% increase in value over the interim period last year.
That gives Zeder a net asset value of 230 cents per share, which means the company's stocks (which closed at 175c on Monday) are trading at a rather attractive 24% discount.
Zeder is anchored by sizeable holdings in KWV Holdings, Capevin and Kaap Agri (the biggest shareholder in Pioneer Foods). These three investments make up more than three-quarters of Zeder's net asset value.
Zeder, which recently held a R496m rights issue, still held R425m in cash at the end of August.
However, it will soon follow its rights in KWV's proposed R150m rights issue - an exercise in which Zeder is the main underwriter.
The interim statements showed Zeder's current cash position was supplemented with a R300m funding facility, which Jacobs said provided the necessary resources to pursue attractive identified investment opportunities.
Zeder, whose equity accounts for eight of its investments, saw earnings of R73m during the interim period - equivalent to about 10c/share.
- Fin24.com