Johnny Copelyn, the enigmatic CEO of Hosken Consolidated Investments (HCI), enjoys resplendent views of the Sea Point promenade from his office, the walls of which feature some of the beguiling South African art works acquired in the group’s acquisition of erstwhile liquor and wine business KWV 15 years ago.
For shareholders, the outlook has not been that pretty in recent years. But that might be changing.
Founded as the investment arm of the South African Clothing & Textile Workers Union (Sactwu), HCI’s modern history began in 1997 when the old insurance holding company was repurposed into a vehicle for BEE initiatives by co-founders Copelyn (general secretary of Sactwu at the time and later an MP) and fellow labour-rights activist Marcel Golding (National Union of Mineworkers).
In 2014, a falling out between the two resulted in Golding, executive chair at HCI, resigning in a very public and messy spat.
Some observers might say, perhaps out of earshot, that in the years since then HCI has become something of a fiefdom controlled with an iron hand by Copelyn, who at 76 is among the oldest managers among JSE-listed entities.
Over the decades, HCI and its investments have evolved into core assets primarily within gaming, hotels, media, mining and transport. Aside from its main portfolio, HCI has readily acquired assets that it later flipped for a hefty turn.
Older readers will recall HCI took a 5% stake in Vodacom for R118m in 1996, which it sold for R1.5bn in 2002, and in 2011 acquired KWV from PSG-controlled Zeder. It sold most of the liquor and wine assets for R1.15bn to entrepreneur Vivian Imerman five years later.
HCI was once a fluid investment vehicle, wheeling and dealing to suit its aims. Could further asset unlocks be on the cards?
Corporate communication from HCI is spartan. Aside from the regulatory interim and annual results, little investor or public relations news emanates from Sea Point. The highlight is the HCI AGM, at which Copelyn elucidates on any query an investor or shareholder throws at him.
His comments are eagerly devoured by shareholders, who have over the past four years come to regard the HCI AGM as an essential pilgrimage. The reason has its roots in February 2022, when a bland Sens announcement forced investors to do some digging.
HCI, via its 49% equity stake in unlisted Impact Oil & Gas, reported that TotalEnergies had struck possibly one of the largest oilfield discoveries in decades off Namibia. That project in block 2913B was aptly named Venus. HCI owned an indirect 20% stake in the block via its 49% shareholding in Impact.
HCI bought its first stake in Impact in August 2014, which marked its entry into oil exploration.
Before the news of the Venus discovery, HCI was trading at about R80. In the aftermath, the share surged more than 130%, hitting R186 ahead of the August 2022 AGM.
Copelyn updated investors on the oil asset at the AGM, saying he would exit it “profitably” once TotalEnergies had announced the final investment decision (FID) sometime in the next two years. He promised to give more information at the 2023 AGM.
By the time that AGM came around, the share was trading at R223.70, due primarily to the oil fervour. Much investor questioning at the AGM related to Venus. At that stage, HCI had invested $220m in Venus with $150m of debt. Initial indications suggested that billions would need to be invested into the well should HCI stay onboard, and that any royalty or dividends might only materialise in 2030 (albeit with a 30-year payment window).
Some shareholders, licking their lips about the potential valuation, called for the oil stake to be sold
Some shareholders, licking their lips about the potential valuation, called for the oil stake to be sold.
In late December 2023, HCI’s stock traded at R202 — near parity to or even at a modest premium to its then-official NAV — as the whiff of oil grew stronger and anticipation grew of a possible oil-based special dividend.
But in January 2024 that investor windfall hope burst like an overinflated balloon.
In a shock announcement, Copelyn said the company was keeping its 20% indirect stake in Venus but had engineered a structure with TotalEnergies where it would forgo half its stake in exchange for a farm-out deal. Put simply, the French company would fund HCI’s portion of the investment needed in Venus in exchange for part of its stake alongside a loan that would be repaid from initial dividends and royalties from Venus’s production.
That went over like a lead balloon. Copelyn had suddenly decided HCI wanted the long-term scenario of an oil-related dividend play. At the August 2024 HCI AGM, the share price was at R186.65, with many shareholders in attendance.
Shareholders asked about a possible unbundling of the oil interests to create value, but Copelyn stated he preferred to “sit tight in an asset that only became cash positive in five years and may have a 20-30 year life”.
HCI’s share price began slipping as the oil play became a distant hope and the crude price declined on President Donald Trump’s determination to “drill, baby, drill”. By the time the August 2025 AGM was held, with oil prices trending even lower and hopes for HCI’s Venus stake becoming monetised evaporating, the share price had hit R124.85.
Copelyn came out in defence of his investment strategy. But he did indicate that the company would unlock value via property sales — even airing openly the value in its 45% stake in Southern Sun and engaging shareholders constructively on unbundling assets.
At the time, Copelyn stated pragmatically: “Within the next year, I’m pretty confident the oil assets will have far more clarity and value; we just need to be patient and wait for the pieces to fall into place. They are currently under way.” All hinged on TotalEnergies progressing with the FID. Once the decision was announced, HCI’s remaining 10% indirect stake in the Namibian block would become inherently more marketable as exploration moved into the pre-production phase.
Still, HCI’s share price hit a low of R116 after the AGM; the global oil price was cratering and hopes of an unlock looked distant. But from that low, HCI had a phoenix-like recovery. At the time of writing, the stock has risen 50% to about R174 with a discount to NAV at 48%.
What changed? Well, for one thing, the Middle East crisis erupted in late February and oil prices surged — imparting greater hope that TotalEnergies would undertake its FID and unlock value in Venus for HCI. In mid-April, speaking at the Namibia International Energy Conference, TotalEnergies Namibia MD Mariam Kane-Garcia said the company was progressing towards a near-term investment decision, subject to the completion of key technical and regulatory processes.
Then there were the year-to-March 2026 results, which saw some intriguing insights from Copelyn. About R1.46bn was raised from property sales, with R647m worth of share buy-backs instigated when HCI was trading at low levels back in late 2025. Further, the troublesome, leaky selling by Sactwu — the group’s cash-strapped main shareholder — had been cauterised.
NAV in the period rose 11% to almost R336 a share. Many of the assets within HCI are solid cash and dividend generators. Copelyn praised the Tsogo gaming asset, which generates buoyant cash flow, and said it was getting a grip on the troublesome online gaming segment. Investment in a new casino in Somerset West, alongside further share buybacks, led Copelyn to see fair upside value in Tsogo.
Southern Sun reported a 20% rise in profits, with HCI’s stake worth R6bn at the current market valuation — though Copelyn believes the premium asset is worth about R16 a share compared with the ruling 994c.
It is unlikely there are any further property-related assets to be sold, perhaps only at the fringes. Further upside value from HCI would come from earnings from its stakes in various listed assets. The Palesa coal division may look like an outlier given its shorter life of mine, though HCI is milking the asset given its renewal of a contract with Eskom.
An intriguing part of the portfolio is industrial holdings business Deneb, whose R1.17bn valuation belies a solid basket of interesting operating companies moving towards the waste and recycling sector.
Looking ahead, HCI remains positioned to benefit from both operational growth in its established sectors and the potential windfall from oil exploration. The completion of TotalEnergies’ FID and subsequent development of the Venus block could transform the company’s energy portfolio into a significant long-term revenue stream.
IM reckons HCI is entering a phase when strategic patience and operational agility may yield substantial returns for shareholders.
The writer holds shares in HCI
