HCI said yesterday it had increased its beneficiary interest in Tsogo Sun securities by 7.75percent, taking its total shareholding to 51.18percent in the company.
While Tsogo Sun’s share price jumped on the JSE after the announcement and recorded an eight-month high of R25.57 a share, HCI’s share price went the opposite direction, declining by 0.69percent to close at R143.50 a share. Tsogo Sun shares closed 0.92percent up at the end of the day at R25.35.
Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers, said the biggest implication of this was that HCI, upon consolidation of financial results, would have a higher attribution of earnings from Tsogo Sun.
“This means HCI’s share of Tsogo Sun earnings will be higher going forward. Another implication is that they now have a more significant blocking stake in terms of any resolutions that need to be voted on at meetings with the shareholders,” Mthombeni said.
HCI was already a majority shareholder at Tsogo Sun and Mthombeni said HCI had a significant representation on the Tsogo Sun board too.
The HCI directors who sit on the board of Tsogo Sun include HCI chief executive Marcel Golding and its chairperson Elias Mphande. The other directors on the board include Yunus Shaik, Jabulani Ngcobo and Mahomed Gani.
She said from a corporate governance perspective the board had the most say on how the company conducted its business.
“HCI, as majority shareholder, has board representation and already significant influence on Tsogo Sun strategy so this transaction will re-affirm the status quo,” Mthombeni added.
And last year HCI announced that it was consolidating its gaming assets under Tsogo Sun in a R2.1billion deal that would see the hotel and entertainment group take over Niveus Investments gaming machine and bingo hall businesses.
The restructuring of Niveus’s gaming assets into Tsogo allowed HCI to appoint Andre van der Veen as chief executive of eMedia and the group said it was confident that the move would release positive energy to eMedia.
HCI is a black empowerment investment holding company listed in the financial sector on the JSE.
- BUSINESS REPORT