Roy Cokayne
THE FUTURE of the under pressure board of PPC should become clearer this week.
This follows the demand by Foord Asset Management, with the support of Visio Capital Management, earlier this month for the board of the listed cement and lime producer to call a special general meeting over the proposed removal of the current board.
PPC rejected this demand but Foord is believed to have submitted a second request for such a meeting last week and PPC has five days in which to respond.
PPC rejected the initial demand because it claimed Foord and Visio did not have the required minimum 10 percent shareholding to force the board to call a special meeting.
Carolyn Levin, the portfolio manager and head of research at Foord, confirmed last week that it would be making another request for PPC’s board to call a special general meeting but later declined to provide any further comment.
PPC last week failed over two days to respond specifically to a list of questions e-mailed to the firm, including whether it had received a second demand for its board to call a special general meeting.
Azola Lowan, PPC’s executive for investor relations and strategy, said on Friday through the firm’s financial communications advisors that PPC was continuing to engage with its shareholders and would make an announcement at an appropriate time.
Foord’s objective is to put in place an independent and strong board that would act in the best interests of the company, its employees and shareholders and which, once appointed, would appoint a new chief executive of the company.
The row between PPC and Foord over the proposed removal of PPC’s board follows the sudden and unexpected resignation last month of chief executive Ketso Gordhan and PPC’s board ignoring Gordhan’s subsequent plea for him to be reinstated. Gordhan said on Friday he believed it was “very appropriate” for shareholders to take action when required to protect their interest.
About R2.7 billion has been wiped off PPC’s market capitalisation since Gordhan’s resignation. PPC shares closed at R32.50 immediately prior to Gordhan’s resignation and closed 0.39 percent lower on Friday to close at R27.90.
Sibonginkosi Nyanga, an analyst at Imara SP Reid, on Friday was undecided on whether the slump in PPC’s share price created a potential opportunity for the firm to become a takeover target. There was not an obvious suitor for PPC because any deal would require a lot of capital but it was difficult to rule out anything.
He said Dangote Cement, Africa’s largest producer, was taking a position in southern Africa but it would be difficult for the Nigerian cement producer to consolidate cement operations in some jurisdictions and get the approval of the competition authorities.
Nyanga said the resignation last week of Richard Tomes, the joint managing director of PPC Cement South Africa was confusing, noting that no other reason was provided by the firm for Tomes’ resignation other than the standard response that he was leaving to pursue other opportunities.