Computer distributor Mustek's planned delisting from the JSE has been delayed, because the new Companies Act has yet to come into effect.
The company said last year that a consortium, led by CEO and founder David Kan, as well as the Trinitas Private Equity Fund, had put a non-binding offer on the table to buy out shareholders for R5.55 a share. Mustek's shares closed unchanged at R5.20 yesterday.
Yesterday, Mustek told shareholders discussions were still ongoing, renewing a cautionary announcement issued on 15 December, repeated on 28 January and 25 February.
Kan explains the delay is due to the date of the implementation of the new Companies Act being pushed out. The new law was meant to come into effect at the beginning if this month.
At the end of March, the Department of Trade and Industry issued a statement indicating the law will come into effect on the day the Act is proclaimed. It has recommended 1 May to the Presidency.
No timeline
Kan says the consortium cannot finalise a timeline until the new law comes into being. He had hoped to wrap up the deal by mid-year. The consortium had received a commitment from three institutional shareholders holding 60% of Mustek's shares to vote in favour of the deal.
As a result of the delay, Mustek can't send out a circular to shareholders. Kan says a draft circular has been submitted to the Securities Regulation Panel, but the authority cannot sign it off until the new law comes into effect.
Under the previous legislation, which was three decades old, companies had to have a scheme of arrangement sanctioned by the court in the event of a management buyout. Kan says this no longer applies.
Once the transaction has been finalised, Mustek will be de-listed from the JSE. Kan will have a controlling stake in the company, with 50% plus one share. He currently holds 10%.
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