Banele
Ginindza
IN A move that hardly caused a ripple in the market, black-owned information technology (IT) company Gijima yesterday announced its delisting from the JSE and its takeover by Yebo Guma Investments, a company now wholly-owned by Gijima chairman Robert Gumede.
This comes as Gijima failed to raise funds through a R100 million rights issue late last year to fund the struggling business, which was unable to comply with financial agreements related to R213 million in borrowings because of tough trading conditions.
In a finalisation announcement and schedule of the group’s winding down published yesterday, Gijima said the last day to trade in its shares on the JSE in order to be recorded in the share register of Gijima and to receive the cash payment of 220c per Gijima share in terms of the scheme was April 30.
Yesterday, Gijima’s share on the JSE gained 4.48 percent to close at R2.10.
The suspension of the listing of the Gijima shares on the JSE is set to take place on May 4.
“It was more a matter of fulfilling regulatory requirements,” Farai Mapfinya, the head of equities at JM Busha, said yesterday about the announcement.
In January, Mapfinya had indicated that delisting the business would make sense as there was no meaningful reason to remain listed.
He added that the primary reason to list was to tap the capital markets and due to the lacklustre response to the company’s rights offer, there was pretty much no reason to hold on to the listing.
Last year Gijima had issued a rights offer in a bid to raise R100m. About 60 percent of the money raised through the rights offer would be used for working capital, with 40 percent going towards capital expenditure.
Most of the stock in the rights offer was taken up by Yebo Guma Investments.
In October, Gijima reported a reduction in net loss for the year to June from continuing operations to R152.3m from last year’s R293.2m loss.
The move to delist comes after Gumede made an offer last week to buy out the remaining minority shareholders through Yebo Guma Investments.
Gijima has also been dragged down by a legal battle with the State Information Technology Agency (Sita) as it tries to hang on to a multimillion-rand Department of Defence contract.
Sita said the contract was awarded in contravention of the constitution and the agency’s procurement rules.
A three-year turnaround plan has been implemented in an attempt to salvage Gijima, which employs over 2 000 staff.