THE BOTTOM LINE
Yet another Iqbal Survé-led Sekunjalo deal goes phut
Two JSE-listed entities controlled by the Sekunjalo boss were about to do a transaction. Why was it suspended?
It was a peculiar looking proposal from the start, but given the close ties of the two parties involved it was one that looked as though it could have been sorted out over a cup of coffee.
Instead this week, two-and-a-half months after initially announcing the proposed transaction, African Equity Empowerment Investments (AEEI) and Ayo Technology Solutions told the market that Ayo’s proposed purchase of the 30% stake in British Telecommunications SA (BTSA) owned by AEEI was on hold.The agreement has lapsed and “the parties are engaging with each other to have the agreement reinstated”, said the joint Stock Exchange News Service announcement, adding rather casually, “Shareholders will be advised should the agreement be reinstated.”
So much for the view that this was a done deal because Iqbal Survé, the key player in the ultimate controlling company of AEEI and Ayo, Sekunjalo, wanted to access his share of the R990m Ayo was going to pay AEEI for the BTSA stake.
The thinking was that Survé would use the cash to repay some of the loans provided by the Public Investment Corporation (PIC) back in 2013 to enable Survé to get control of Independent Media. According to the PIC, by March 2017 the consortium, whose lead sponsor was Survé, owed just over R1bn with R408m of that due in August 2018.
The failure of the two related parties to reach agreement on the BTSA stake also raised some uncertainty about Ayo’s strategic partnership agreement with Sasol. The agreement, which involves Sasol’s communications’ needs, was apparently based on BTSA’s work for Sasol.
An AEEI spokesperson explained that the Sasol-Ayo agreement was part of an “alliance agreement” between Ayo and BTSA designed to acquire a bigger market share from “various customers that require broad based empowerment spend and service supply”. It is not affected by ownership of the BTSA stake.