NEARLY 30 million shares changed hands in African Sun Limited (ASL) on Monday at 2,6 US cents, raking in US$758 463 as the group’s new shareholders complete transactions around the hospitality company.
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The same shareholders – Brainworks Capital traded 70,5 million shares in Dawn which were pushed through at 1,3 US cents worth US$916 619.
On October 2, ASL sold its 12% stake in Dawn at a premium of 47% to the price on the day.This was followed by an announcement that the 12% shareholding in Dawn, was bought by Brainworks Capital and that the purchaser had also acquired 32% of ASL.
The 32% was previously held by ASL Chief executive Shingi Munyeza’s family through Nhaka Trust.
In return, Nhaka Trust was issued 17,02% of Brainworks Capital through a share and cash deal.
African Sun hopes to leverage on its shareholder base that now includes the likes of African Development Corporation (ADC), Brainworks and Old Mutual as some of the high profile shareholders of the hospitality company. Brainworks becomes a significant shareholder in both African Sun and Dawn.
Brainworks, through its anchor shareholder, ADC, intends to list either on the Frankfurt or Toronto Stock Exchanges. This could be a real sweetener for Munyeza, because he would then be in a market that is very liquid and versatile for him to get real value for his investment in African Sun. This could also offer him an attractive exit strategy. After three years of repositioning ASL, Munyeza has emerged with an African Sun whose short-term debt is reduced or eliminated, a strong funding partner for growth and an opportunity for him to personally unlock value through the Brainworks’ share and cash swop.
The current liquidity crunch on the local market is going to negate real value growth. The opportunity once again becomes exports and offshore investments. Other investment analysts said given the liquidity crisis which was worsening, Munyeza was realigning himself with people who have ‘ready solid’ cash.
ADC holds 50,24% of BancABC, which has successfully capitalised by raising US$50 million in 2012.ASL now owns 16,54% of Dawn and it is believed that this would also be sold to eliminate further short-term debt. Riding on the successful hosting of UNWTO Summit in August, ASL appears to be poised to take advantage of the growing international arrivals into the country. However, the domestic market appears constrained due to the current liquidity crunch.
The effect of the current high sovereign risk profile would still keep most investors at bay thereby starving the nation of much-needed capital inflow through foreign direct investment. The newly-elected government has its job cut out and would have to ensure that confidence in the economy is restored.