Huge Group's empowerment partner, Mojaho Trading, has effectively sold out of the company, leaving the JSE-listed telecoms group to find a new black consortium or company to buy into its stock.
Mojaho sold 5.6 million shares in the listed company, for a total value of R2.4 million in the latest trade, announced yesterday. This sale was a continuation of previous sell-offs and leaves the empowerment entity with two million in shares, which are subject to a call option.
Huge CEO James Herbst explains Mojaho was a legacy shareholder dating back to before Huge's inception. Mojaho bought 30% of what was then Telepassport in 2005, for R20 million, thanks to funding from the National Empowerment Fund.
Huge's chairman, Vincent Mokholo, is a director at Mojaho.
Subsequent to the empowerment deal, Telepassport was bought out in a move to create what is now the Huge Group. When Huge listed two years later, it bought out the stake for a prelisting price of R10 million in cash, and 12.6 million shares at R1.87 a share.
Herbst explains the stake, on listing, was worth R31.5 million. However, the group's stock has been losing value since its initial offer price of R2.50.
The stock, sold in six different tranches by Mojaho Trading, was disposed of at a per-share price of between 40c and 55c. Huge shares closed at 43c yesterday, giving it a market capitalisation value of R42 million.
Mojaho Trading's sales - all on 9 January, but disclosed yesterday - resulted in a total of 5.62% of Huge Group's shares in issue going back to the market.
The latest sell-off means Mojaho is no longer an unencumbered empowerment partner, says Herbst. He adds Huge is keen to do an empowerment deal, but needs to find a partner that will add value and have an appetite for buying into the company.
Currently, 80% of the company is held by six private people and Mojaho's stock went back into that pool, Herbst adds.
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