Dynamic Cables and one of its shareholders, the Cape Empowerment Trust, have entered into discussions.
The companies yesterday issued a joint statement indicating they were in talks, which could affect share prices. However, the nature of the talks was not disclosed.
Dynamic Cables provides electrical cables for the low-, medium- and high-voltage industries. It also manufactures a range of cable products to customers in the telecommunications, instrumentation and electrical industries.
Its latest full-year results, to December 2008, indicate revenue declined from R130 million to R123.5 million, and it made a net loss of R3.8 million, compared to a profit of R9 million in 2007.
In the six months to June, Dynamic again reported a slowdown in revenue, to R46.9 million from R57.4 million the prior year. Its net profit also dropped and it reported a net loss of R12 million, compared to a prior profit of R1.6 million.
The Cape Empowerment Trust was its biggest shareholder, with a 41.36% stake in the company at the end of the year.
However, the investment group has since de-consolidated its stake in Dynamic and it no longer controls the cable company. Its current stake in the cabling firm is not known.
The trust is a black-controlled, managed and empowered diversified investment holding company. It was founded by Shaun Rai and others in 1998, and listed on the JSE in the same year.
Its investment portfolio spans the property, leisure, security, financial and ICT sectors. Two years ago, it was one of several organisations investigated by the Financial Services Board for insider trading.
Dynamic's shares were unchanged at 13c this morning, as were the trust's shares at 30c.
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