Simeka BSG directors, Mohammed Varachia and Tozamile Botha, have sold 17.3 million securities - almost 5% of the company's issued share capital - in an off-market sale to Sanlam Investment Managers, at a price of R19.38 million.
The transaction, which took place on Friday, enables Varachia and Botha to fulfil outstanding personal obligations from Motoma Information Communications Technology Group (MICT).
Varachia and Botha - Simeka BSG group CEO and deputy chairman respectively - co-founded MICT. In 2005, MICT merged with Xantium Technology Holdings and listed new entity Simeka BSG on the JSE's alternative exchange in 2006.
Retaining interest
Although Varachia retains approximately 12% interest in the company, he says he would have preferred to hold onto his portion of the shares sold, despite Simeka BSG's share price having increased by 125% in the last six months.
"When we did the merger with Xantium, in 2005, we were meant to place these shares in the market to meet certain MICT obligations. Nevertheless, we felt it was too early to try and place them and so we held on as long as possible. Personally, I would have preferred to hold onto these shares a little longer as I still believe we are undervalued," he explains.
The deal has additional benefits for Simeka BSG, adds Varachia. "We have been looking to increase the institutional shareholding in the company, and this share transfer gave us the perfect opportunity to do just that."
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