The Mvelaphanda Group's proposed unbundling will not affect business at the telecommunications company, says Vox Telecom.
Last week, the holding company stated it would not make any new investments, and its current stakes would be unbundled.
“Over the past five years, significant value has been created for shareholders in the underlying investments of Mvela Group, excluding those in the telecoms and media and technology sectors,” it says.
However, this is not shown in its share price, which it believes is trading at a discount. This morning, the investment company was trading unchanged at R6.64. It adds that its current corporate structure is not “appropriate to take advantage of the changed black economic empowerment landscape”.
As a result, to give value to shareholders, the company will unbundle its assets over a period of time. Mvelaphanda was formed in 2004 as Tokyo Sexwale's empowerment vehicle. He resigned from the company after joining government.
Negative value
Mvelaphanda owns 12.3% of Vox. Tony van Marken, CEO of Vox, says the company is not concerned as the shift would happen at shareholder level and would not affect its operations. He says it is a longer term goal and is likely to take between three to five years for the unbundling process to happen.
In its results to June, Mvelaphanda says Vox “continues to trade satisfactorily due to consumer demand for managed network and least-cost routing services”. However, it points out there is “continued uncertainty towards Vox Telecom in the market”.
As a result, the investment company is monitoring Vox and “engaging material shareholders and management to ensure the company is managed efficiently, including new revenue opportunities”.
Vox's share price at 30 June was 55c a share, which implied a negative intrinsic value of R235 million net of debt for Mvelaphanda.
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