The Mineworkers Investment Company (MIC) planned to pursue further acquisitions in telecommunications and health care, chief executive Mary Bomela said yesterday at the presentation of the company’s annual results.
The MIC recorded a 31 percent growth in its investment portfolio during the year to R4.9 billion. Group net asset value rose 29 percent to R4.15bn, while gearing dropped to 8.4 percent from 10.5 percent. The company declared a 60 percent rise in dividends, she said.
The MIC is wholly owned by the Mineworkers Investment Trust, an organ of the National Union of Mineworkers (NUM). Started with initial capital of R3 million 19 years ago, it has grown its portfolio to nearly R5bn and aids 1.2 million beneficiaries in mining towns and labour-sending areas.
“Cash generation and growth is important to us. We need to see a good return. We are always looking for new investments, and we look at a minimum of 25 percent equity,” Bomela said.
The MIC’s strategy is to invest a minimum of R100m in companies that are worth at least R500 million. “We don’t have an appetite for start-ups or really hi-tech businesses which required specialised skills. We have appetite for ‘sin assets’, for example gambling.
“In the past we have had to walk away from some investments because of the way they do business.”
The company had no plans to look outside South Africa for opportunities, but would encourage companies in which it invested to do so, Bomela said.
“If you don’t have a presence on the ground, it is hard to manage businesses by remote control.”
Bomela, who has been chief executive for two years, said the company would relook at its businesses and the board was expected to make an announcement as it prepared to mark the 20-year milestone.
“The black economic empowerment landscape has changed. We don’t want to tick boxes, but to truly transform,” she said.
The MIC does not invest in areas where NUM organises.
Investees include Primedia, Puregas, which was added to the portfolio last year, and FirstRand Empowerment Trust, in which the company raised its stake to 10.5 percent this year. Last week it reported a deal to lift its investment in Ascendis Health by R200m.
The MIC’s stake in Primedia was cut last year after the media company had to restructure its capital structure. The MIC’s share declined to 21.7 percent from 49.9 percent.
“We are now conservative on debt, but we know that in order to make maximum return, you have to put in debt but it should not be highly geared,” Bomela said.
The increase in dividends from the MIC comes as a number of unsustainable mining shafts are closing down and thousands of mineworkers have been retrenched.
The MIC focuses on creating a sustainable asset base to fund social programmes, including bursaries and farming projects in the labour-sending areas and mining areas, which are channelled through the Mineworkers Investment Trust.
The company is also involved with the retraining of mineworkers who have been retrenched from mines.