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Bioclones hears London calling

Jan 13 2010 12:50 Marc Hasenfuss

Company Data

Sekunjalo Investments Ld [JSE : SKJ]

Last traded R0.77
Change R0.02
% Change 2.67%
Cumulative volume 148,869
Market cap R376.79m

Last Updated: 28/05/2012 at 19:31. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Cape Town - Empowerment group Sekunjalo Investments [JSE:SKJ] has reiterated its intention to seek an international listing for its 49% held biotechnology subsidiary, Bioclones.

Bioclones was initially set for a listing in late 2008, but these plans were scuppered when the global financial crisis eroded international market sentiment.

According to Sekunjalo's latest annual report, Bioclones' ultimate goal of listing on a foreign exchange had been prioritised.

The annual report said the listing would not only unlock some of the underlying value in the Bioclones business, but also provide it with significant amounts of capital.

The capital would be used to fast-track the company's Pretoria-based facilities and as well as research and development to transform the business and its global patents into a global business.

While Bioclones is not generating meaningful revenues for Sekunjalo, the company does hold a multitude of global biotechnology patents in the areas of novel technologies, infectious diseases and cancer treatment molecules.

The company's Biogeneric Molecule division, which produces Repotin and granulocyte colony-stimulating factor (GCS-F) hormones, will compete in a market estimated at $17bn.

Sekunjalo CEO Khalid Abdullah told Fin24.com on Wednesday that Bioclones had started its listing process. "We are currently talking to our corporate advisers in the UK, and they will advise us of the appropriate time to go to the market."

Although not committing to a time frame for the listing, Abdullah confirmed Sekunjalo had a preference for a London-based listing for Bioclones.

He said Bioclones could look to raising up to R200m on listing.

Sekunjalo bought 49% of Bioclones for R20m in 2005. The original Bioclones backers were beer giant SABMiller and mining house JCI. It has been suggested that collectively SABMiller and JCI (then under control of the late Brett Kebble) invested about R200m in Bioclones.

Sekunjalo's latest annual report places the 49% in Bioclones at a cost value of R145m, giving the business an enterprise value of about R300m.

According to the annual report, Sekunjalo carries its investment in Bioclones at cost because of the "complexities and subjectivity" involved in determining a fair value for the business.

Two years ago, however, Sekunjalo placed a R340m valuation on its Bioclones stake, inferring a value of nearly R700m on the business.

- Fin24.com

 
 
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