Mario Pinheiro, executive chairman of CCH, has announced his intention to resign, effective from 15 May. The group has also issued a profit warning for the period ending June 2000.
The announcement comes as part of an arrangement between Pinheiro, merchant bank Brait and CCH`s management team, led by CEO Aletha Ling. Under the arrangement, Brait will acquire a significant minority stake in CCH, in the form of a replacement capital investment.
The parties have not disclosed the details of the arrangement, such as the size of the stake, or whether the management team acquired any new shares in the process. They have said that Pinheiro will retain a significant holding in the group.
Pinheiro says his departure was partly linked to the recent insider trading investigations, which he says affected his health. He adds that he also achieved what he set out to do with CCH, and has put a strong management team in place under Ling.
Brait deputy chairman Thierry Dalais says this is the second time Brait has invested in CCH. The first time was in 1996, a year prior to the group`s listing.
Regarding the profit warning, CCH attributes the expected decline in headline earnings to the impact of restructuring during the year; a decline in profitability in its major acquisition in 1999, Infracom; losses in its Middle Eastern operation and at Orca Technologies; and the time and energy taken up by the executive team during the insider trading investigations.
CCH gained 54c, or 7%, to close at R8.25 on Thursday prior to the announcement.
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