Still life with roadblocks
A NIGHT in Paarl this week was full of surprises.
Considering the importance of attending a farewell function on Tuesday evening for outgoing KWV chairperson Danie de Wet (an event where Remgro chairperson Johann Rupert was the guest speaker), my mind turned to the rather long drive back home to Kommetjie.
The chances of me stepping out of a KWV function - where they are likely to serve the odd glass of vino - in a responsible frame of mind seemed at best slim. To preclude any mishaps on the road, I thought it best to book a hotel room as close to the function as possible.
Imagine then my incredulity when meandering down Paarl's main drag at midnight at sighting a roadblock.
A kind policeman checked my licence and sent me off. He seemed to go out of his way to ignore the fact that my tie was around my head and my shirt stained purple from Pinotage spillage - not to mention that I must have crushed a traffic cone (or three) in hastily pulling over to the shoulder of the road.
Yup, Paarl was in a conciliatory mood that fine evening.
Earlier, I was surprised to hear Johann Rupert urging wine giants, the Paarl-based KWV and Stellenbosch-based Distell, to work together and build together in what is proving to be a prolonged tough period for the industry.
The phrases "work together" and "build together" might have various connotations to various people - especially those who know the sometimes fractious history between KWV and Remgro associate, Distell.
To most, I guess Rupert's conciliatory remarks were well suited to the spirit of the occasion.
To a journalist - and I admit to having a predilection for getting drunk on speculation - these phrases could easily be extended to mean a far more formal arrangement between KWV and Distell.
I have long held, personally speaking, that the far smaller KWV needs to tie up with Distell. Not only is there safety in Distell's diversified brand categories, but few can argue that the Stellenbosch crowd have a certain knack for marketing successful brands.
Naturally, KWV would want to approach such a union from a position of strength. In that regard KWV CEO Thys Loubser appears to be doing a sterling job under trying circumstances. Frankly, if Loubser - who has curbed the old cooperative culture at KWV without tampering too much with the company's fine traditions - can't turn KWV around, I don't think anyone can.
Some observers may reckon a Distell/KWV tie-up won't even reach the front steps of the Competition Commission. I'm not so sure about that. Even Rupert alluded to the fact that the biggest challenge to the local liquor sector came from large international players.
Interestingly, Rupert was also highly complimentary about the management of SABMiller - which, of course, is a major shareholder in Distell. Let me not even begin to speculate here.
The darkest hour is just before the dawn
THERE is a dreadful sense of déjà vu about developments at specialist financial services business African Dawn.
The way the company's share price has dribbled down unfortunately recalls similar trading patterns at former financial service darlings like the Appleton Group, TBB Holdings, Unifer, Saambou and Real Africa Durolink.
The recent board changes - which include the appointment of a quartet of heavyweights (including former registrar of banks Christo Wiese) - suggest some really experienced hands are needed on the tiller.
What exactly has transpired at Afdawn, which has seen its share price collapse from 550c in 2008 to under 100c, will probably only become clear much later. But for now shareholders probably won't take comfort in my contention that when companies haul the big guns into the boardroom it might already be too late.
Strat to hell boys
I WONDER how many of the good folk who put up the bucks for StratCorp Empowerment Holdings (SEH) are aware that their R28m investment in Pretoria-based financial services company StratCorp has more than halved in less than eight months.
On the last day of February 2009 SEH saw fit to subscribe for 54 million shares in Stratcorp at 48c per share. This gave SEH a 34% stake in StratCorp, but also provided a struggling StratCorp a much-needed line of capital.
StratCorp dipped to 20c on the AltX this week, meaning that the R28m invested by empowerment investors is now worth less than R11m.
Earlier in 2009 Finweek questioned the wisdom of the shares-for-cash placement, suggesting the exercise could end up benefiting the struggling StratCorp far more than it would the empowerment investors.
Finweek also asked how money raised from - what appears to be largely unsophisticated black investors contributing investments via debit orders - was not rather responsibly invested in a diverse portfolio of blue chip shares.
Don't suppose it will ever be clear who really instigated this risky investment. But there might be hell to pay if StratCorp can't produce some promising interim numbers come the end of October.
Then again the geniuses at StratEquity - an investment subsidiary of StratCorp - also put a bunch of empowerment investors in mangled meat group Best Cut Holdings a couple of years ago.
So far no one has kicked up a fuss at Best Cut, which leads me to believe the empowerment participants may well be blissfully unaware of the situation.
- Fin24.com