The PIC invested R167 million for a 25 percent ownership stake, R133 million to acquire an existing portion of a shareholders’ loan, and R285 million for a bridge loan.
The PIC invested R167 million for a 25 percent ownership stake, R133 million to acquire an existing portion of a shareholders’ loan, and R285 million for a bridge loan.
Sekunjalo Independent Media Consortium has dispelled the notion that the purchase of Independent Media, the largest media group in South Africa, from the Irish for R2 billion was financed only by the Public Investment Corporation (PIC).
Wednesday, the company went before the Standing Committee on Finance (SCoF) to explain how its umbrella company, Sekunjalo Group, had inked an agreement with the Irish media corporation, which at the time owned Independent Media in South Africa.
Independent Media’s team includes Dr. Iqbal Survé, executive chairman of Sekunjalo, as well as Takudzwa Hove, chief operating officer, Aneez Salie, Sifiso Mahlangu, editor of The Star, and Ayanda Mdluli, editor of Daily News.
SCoF was informed that SIM was able to save its investors hundreds of millions of dollars by negotiating the sale price of its Irish owners down from R2.6 billion to approximately R2 billion, “saving hundreds of millions of dollars for its shareholders, including the PIC.”
The PIC invested R167 million for a 25 percent ownership stake, R133 million to acquire an existing portion of a shareholders’ loan, and R285 million for a bridge loan. In addition, it provided R215 million of the R365 million needed to fund Independent Media Consortium (SIM55 )’s percent equity stake in Independent Media.
Hove stated, “Sekunjalo persuaded additional investors to co-invest in Independent Media, which contributed the remaining money of about R1.15 billion.”
Hove stated explicitly that the PIC has not provided any financial support to Independent Media since 2013, and that “only the Sekunjalo Group is giving Independent Media with financial help to expand its business and compete in the marketplace.” To date, the Sekunjalo Group has donated about R500 million directly and indirectly, allowing the PIC to benefit as a stakeholder without contributing extra cash.”
Despite facing severe obstacles, SIM was able to acquire the Independent Media company from the Irish. Such obstacles included the PIC’s reduction of financial backing for the acquisition from R2 billion to R850 million, as well as “aggressive and public posturing by the (SA National Editors Forum) and its chairman Nic Dawes to derail the sale.”
“Intense smear efforts by competing media such as the Times Media Group and Naspers, who feared the business competitiveness of a black-owned enterprise as well as a rival and varied narrative in the public sphere.
The presentation stated, “Attempts to influence the Irish by senior, privileged editorial personnel at Independent Media, who also attempted to submit their own bid and preserve editorial control.”
Hove told SCoF that Independent Media endured a difficult media climate in the early years following the successful sale. “One of the media groups had a well-funded effort designed to inflict as much harm as possible on Independent Media and its chairman in order to diminish their power in the media landscape.”
bongani.hans@inl.co.za
BUSINESS REPORT ONLINE
