Cape Town - CSG Holdings, which moved from the Altx to the main board of the JSE on Monday, announced on Wednesday that AfriGem Investments was buying 8.3 percent of its shares, taking its BEE shareholding above 30 percent.
AfriGem, a wholly owned subsidiary of Patrice Motsepe's African Rainbow Capital (ARC), has 99 percent broad-based black ownership, including church groups, trade unions and women's groups.
CSG said the issue price, R1.18 per share for a total consideration of R48.3 million, represented a 15 discount on the the 30-day volume weighted average trading price for the period ending October 6.
Pieter Dry, chief executive of the contract services group, said it was delighted to welcome AfriGem as a strategic BEE investor.
He said AfriGem had indicated its intention to be a long-term investor.
“This cash injection will bolster our reserves to allow the group to continue its strategy of expanding acquisitively into a well-recognised leading brand in all of our chosen specialist outsourcing sectors, without diluting our BEE shareholding,” said Dry.
He added various potential acquisitions were being assessed. CSG shareholders are due to vote on the transaction at a general meeting on January 13.
In a separate statement, CSG reported a 32 percent increase in operating profit on a 43 percent increase in revenue for the six months to the end of September. Revenue came in at R832.79 million (R583.25 million) and operating profit was R61.32 million (2015: R46.59 million).
The company said the improvement was achieved through both organic and acquisitive growth. It included the benefit of an additional shareholding in Ukweza Holdings since October 2015 and earnings from the security and cleaning acquisitions included for the full six months.
Noting the impact of a non-cash once-off re-measurement related to ConinghamLee acquisition in the comparative period a year before, CSG reported a small decrease in profit for the period, from R43.8 million to R43.5 million.
However, CSG said, “if the non-cash non-recurring item relating to ConinghamLee in the comparative period last year is excluded in the calculation, earnings from normal operating operations increased by 30.6 percent”.
Further diluted by the private placement of 29,2 million shares and the sale of 35 percent shareholding in M&S Projects to improve their black shareholding, headline earnings per share recorded a 2 percent decrease to 9.59 cents per share.
AFRICAN NEWS AGENCY