It’s rather amusing that tycoons Christo Wiese and Johann Rupert still have a penchant for small diamond ventures. Older readers will remember that Rupert and Wiese had a bitter tussle over Ocean Diamond Mining Holdings (ODM) about 18 years ago. The Rupert family controlled Remgro’s diamond subsidiary, Trans Hex, and was keen to acquire ODM. But Wiese thwarted the takeover effort by building a kingmaker stake in the promising diamond business, then dangling his ODM shares out to a higher takeover bid from marine diamond miner Namco.
Trans Hex opted for second prize, buying operational assets from the less impressive marine diamond miner Benco. But it never really found the operational traction it needed. In 2010 Remgro unbundled Trans Hex.
In 2016 Wiese joined investment company RECM & Calibre as the anchor shareholders at Trans Hex. Despite initial excitement around Wiese’s involvement, Trans Hex’s market value has taken a pasting, shifting down from R632m at the start of 2017 to R173m.
The jury is still out on the acquisition of the old Namaqualand diamond interests from De Beers, but it was heartening to see a marked increase in production from these operations in the year to end-March.
Meanwhile, Rupert — via Reinet — has quietly invested in two SA diamond mining projects: Jagersfontein, which scours waste tailings; and Rooipoort, which mines on an unexploited site near Kimberley. These interests don’t appear to be moving the needle at Reinet, but Rupert noted recently that both are fully operational and continue to repay loans to Reinet.
At the end of March the projects were carried at their estimated fair value of €39m — well down on the previous year’s valuation of €56m. Though the decrease in estimated fair value mainly reflected repayment of loans and interest of about €10m, it seems fair to say Reinet’s diamond ventures are not yet producing glittering returns.
My mischievous side can’t help contemplating the irony of Reinet mobilising its diamond interests to bid for Trans Hex. It’s unlikely, I know. Besides, RECM & Calibre is a "skrik vir niks" deep-value investor that won’t be moved easily out of Trans Hex. Still, Wiese, whose portfolio looks slightly shabbier since the Steinhoff debacle, might notice if a juicy carat were dangled.
Off you go then ...
Investors will note a certain resistance to the reappointment of certain nonexecutive directors — breaking the usual pattern of 99% shareholder support for such resolutions.
What transpired at PSG is a Sunday school picnic compared with the AGM of 4Sight Holdings
At last week’s PSG group AGM several nonexecutive directors attracted pushback to their re-election. I’m sure shareholder sentiment will be noted by PSG — and by the directors concerned.
But what transpired at PSG is a Sunday school picnic compared with the AGM of technology group 4Sight Holdings. The resolution to re-elect nonexecutive director Conal Keith Lewer-Allen was shot down spectacularly: his re-election was supported by less than a quarter of the shareholder votes cast.
In more than 30 years of financial journalism, I don’t recall too many AGMs at which a nonexecutive director’s re-election was not approved. It’s usually clear if there is a swell of shareholder resistance, and the director in question is likely to resign before the AGM rather than suffer the indignity of being voted out.
It seems Lewer-Allen may have been taken aback by events at the AGM. The company may also have been taken by surprise, as no candidate has been forwarded as a replacement.
4Sight is a new (and acquisitive) company, making it difficult to discern if Lewer-Allen deserved the boot because something went strategically awry.
Lewer-Allen, who holds more than 20m 4Sight shares, serves as chief marketing officer for 4Sight subsidiary Digitata. He certainly was not tardy, with the annual report showing 100% attendance at various directors’ meetings.
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