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Johannesburg - Hosken Consolidated Investments (HCI) [JSE:HCI] will buy back R300m worth of shares from management, the investment firm said on Monday, giving the executives funds to buy out its biggest shareholder from an HCI spin-off investment.
HCI, whose interests span broadcasting, textiles and hotels, said it will buy back R300m worth of shares from entities controlled by its chief executive Johnny Copelyn, chief financial officer and former executive chairperson Marcel Golding.
Golding was ousted from HCI on October 30, 2014, after a fall-out over Ellies shares he bought through HCI's subsidiary Sabido, owner of etv. He also resigned as etv CEO after being suspended by HCI.
Read: Golding cuts ties with HCI
The executives will use the proceeds to buy the shares granted in a spin-off of US subsidiary Montauk Holdings to HCI's biggest shareholder, the Southern African Clothing and Textile Workers' Union.
The union, which owns around 42% of HCI according to Thomson Reuters data, is considering selling its 30% stake in Montauk because it "does not fit its investment mandate of supporting businesses that operate in South Africa", HCI said.
Montauk is due to list separately in Johannesburg next week. The company produces and markets biomethane and electricity generated from landfill gas.
Under the buyback deal, HCI will buy the shares at R150 each, representing a 5.6% discount to Friday's closing price.
HCI said that after buying back and cancelling the HCI shares it will hold 5.5 million treasury shares. Shares in the company closed little changed at R158.26 before the release of the announcement on Monday.
What Professor Patrick Bond said about the axing of Golding in October:
