Thebe Investment’s latest venture is into the entertainment business, reports Reg Rumney
THE formation of a joint venture between cinema chain Ster-Kinekor and Moribo Investments, the subsidiary of ANC-linked Thebe Investments specialising in sport, entertainment and sporting ventures, aims to bring cinemas to black areas.
It kicked off with the opening of a cinema in a shopping complex in Dobsonville this week, and many more are planned.
The new company, to be known as Ster-Moribo, is owned 50-50 by Ster-Kinekor and Moribo, which also has an 18 percent stake in Games Africa. The chairmanship will rotate every three years between the two partners, with Moribo chairman Moss Mashi- shi elected the first chairman.
What Ster-Kinekor brings to the party is its expertise, infrastructure and goodwill, and in that sense Ster-Moribo is getting an almost free entry into a profitable industry.
Moribo gives the new company credibility and the knowledge of the township markets.
Ster-Moribo has bought from Ster-Kinekor four existing cinema complexes whose audiences are now mainly black, for R4,5-million, half of this put in by Ster-Kinekor, half by Moribo. They are Kine Centre, Carlton, Hillbrow and Highgate.
The new Dobsonville cinema will cost R1,5-million, again financed 50-50 by Ster-Kinekor and Moribo.
Mike Egan, managing director of Interleisure, which owns Ster-Kinekor, notes the sums themselves are unimportant. “We are not an asset-based company.”
He points to the market value of Interleisure being six times its underlying asset value.
The intention is to ensure Ster-Moribo has the capital to more than double its size. However, new capital will have to be raised, again on a 50-50 basis, if Ster-Moribo is to fulfil big expansion plans. A new cinema costs R2-million to R3-million.
Mashishi says the strategic focus will be on black areas, but that it is hard to be specific about where exactly these cinemas will be. Neither Ster- Moribo nor Ster-Kinekor is in the business of property development, so the setting up of cinema complexes depends on the construction of suitable sites.