SHARES in New Africa Investments Ltd (Nail) continued to rally on Tuesday as speculators eyed its deep discount to net asset value amid persistent reports that it is poised to restructure. The leading black empowerment company was quoted 19 cents, or almost 5% higher. “Nail is sitting on a big discount to its net asset value (NAV) and would be a prime target for a share buy-back when the rules are changed,” said one Johannesburg broker. An amendment to the South African Companies Act that would allow share buy-backs has been passed and needs only the presidential signature to pass into law. Nail has been battered reports that two of its founders will be pressed into resignation over a management share scheme which provoked outcry among minority shareholders.
Meanwhile, African Merchant Bank Holdings Ltd said on Tuesday it is withdrawing a cautionary notice that had said that the bank is mulling proposals that could lead to the dilution of majority shareholder Nail’s stake.
AMB is currently 53% owned by black empowerment group Nail although the bank’s management has a contract allowing it to manage it independently of the majority shareholder.