South African empowerment group Johnnic Holdings is looking to sort out its pyramid structure, as required by the JSE Securities Exchange South Africa, by the end of 2003, Johnnic Chief Operating Officer Jacob Modise said in an interview on Monday.
Following the recent unbundling of its interest in cell phone group MTN, Johnnic Holdings remaining asset is a 62,5% stake in media and entertainment group Johnnic Communications.
“We need to collapse Johnnic Holdings’s pyramid structure but we are in no rush. We have a lot of options, such as taking out (Johncom) minorities, conducting a reverse merger or unbundling our stake in Johncom,” Modise said.
One particular option Johnnic Holdings is looking at is diversifying into other sections of the economy, where there are a lot of empowerment opportunities, using the holding company shell, he added.
As a result of Johnnic Holdings’s significant holding in Johncom, Johncom is currently trading at a 40% discount to its net asset value and Johnnic Holdings would look to unlock Johncom’s value.
Regarding Johnnic Holdings’s expansion plans, Modise said the group was looking to expand further into Africa, in similar fashion to MTN, especially through book retailing and movie group Nu Metro.
“On the media side, we are looking to grow in Africa either by buying existing titles or introducing new titles,” Modise said.
The National Empowerment Commission (NEC), which holds 28% in Johnnic Holdings’s voting pool, will need to be renewed again for the second time after being renewed in November 2001.
The NEC took its 28% in Johnnic Holdings seven years ago when mining and commodity giant Anglo American sold its take in Johnnic to the empowerment consortium.
“I’m quite sure the voting pool will be extended for a second time,” Modise said. – I-Net Bridge