iBurst's listing on the JSE has been put on hold, because foreign investors want to rather invest in an “offshore” entity.
The vehicle that iBurst SA and iBurst Africa were going to use to make their d'ebut on the JSE was S&J Land Holdings, which is listed on the JSE, although trade in its shares is suspended as it is a cash shell*.
However, foreign investors are concerned about fluctuations in the value of the rand against the dollar. As a result, majority shareholder Galela Telecommunications will no longer use the S&J vehicle to list its 80% of iBurst Africa and 28% of iBurst SA.
The listing was set to be worth around R2 billion and was initially mooted to take place in June.
Yesterday, S&J told shareholders that it and iBurst Africa are now looking at creating an offshore vehicle, which may still list on the Johannesburg-based bourse. The new entity would, however, be subject to Reserve Bank approval.
In April, the suspended company said Galela Telecommunications intended to list its assets, which are stakes in iBurst SA and iBurst Africa, through the S&J cash shell. The listing would have seen the suspended company take over 86% of iBurst Africa and 28.7% of iBurst SA.
Thami Mtshali is the founder and sole owner of Galela, which gives him access to stakes in the unlisted iBurst SA and iBurst Africa. iBurst Africa provides broadband to countries such as Ghana and the Democratic Republic of Congo.
The S&J board of directors will “in due course” decide if they will invest in the Galela vehicle when it comes to market.
*A cash shell is a listed company that owns only cash or shares as it has disposed of all, or a substantial part of its business. It is a possible vehicle for other companies to list through as it is already present on the JSE.
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