Sekunjalo INM purchase takes shape

The Sekunjalo Independent Media (SIM) consortium has named additional members of a group which is set to buy the South African operation of Irish-based Independent News & Media (INM).

The group includes government representation, and an unnamed Chinese Consortium.

In February this year, Irish based INM signed a heads of agreement with Sekunjalo for the sale of INM South Africa (INMSA) for a consideration of R2 billion (€150.6m/$227m).

INM SA includes online news portal, iol.co.za, and print titles including The Star, the Sunday Independent, The Mercury, and the Cape Times.

The announcement was made in Cape Town by Sekunjalo chairman Dr Iqbal Surve who noted that the details of shareholders and funders had been made public  due to “a huge amount of unnecessary speculation which had offended the privacy of such arrangements”.

The announcement by SIM also follows a statement issued by Independent News & Media in Ireland, on Monday (June 17) confirming the positive vote by over 99% of INM shareholders in favour of the sale of INMSA to the Sekunjalo Group.

Dr Surve said that since SIM had been holding irrevocable undertakings from the Irish company’s major shareholders for some time, he was pleased by the strong endorsement by the shareholders, which he called “a further positive endorsement of the transaction”.

All that remained now to close the transaction was approval from the South African Competition Commission. Since this was at an advanced stage, he was confident that ownership of the media group would soon “return to South Africa”.

“These are exciting times for us and the country, and we are happy with the INM Shareholders’ decision,” said Surve. “Our advisors from Citibank, ENS, and auditing and tax partners conducted an extensive due diligence and we looked at the business thoroughly. We know we can continue to grow and run this media group profitably.”

Announcing the shareholding structure, Surve said that the two main shareholders would be Sekunjalo Independent Media consortium with 75%, and the Government Employees Pension Fund acting through its authorised representative the Public Investment Corporation SOC Limited (PIC), with 25%.

The lead shareholders and main consortium members within SIM would include:

  • Sekunjalo Investment Holdings;
  • trade union investment companies, the Congress of South African Trade Unions (Cosatu);
  • investment company Kopano Ke Matlaka;
  • SACTWU Investments Group;
  • and a special purpose vehicle which will house a 10% reserved for employees of the company.

This lead shareholder grouping will represent 63% of the consortium.

The remaining 37 % of the shareholding in the SIM consortium will be made up of a number of broad-based value adding partners including the Black Business Chamber.

Funding, said Surve would firstly come from the Sekunjalo Consortium itself, from banks, including a firm commitment from an international bank, the trade union investment companies, the GEPF acting through its authorised representative the PIC and a Chinese Consortium.

To ensure that the business has sufficient capital resources to reinvest in vernacular titles, digital strategy, reinvigorating existing titles and an African growth strategy additional funding has been arranged which may see a further shareholding or investment of 20% placed with the Chinese Consortium, Sekunjalo said.

The SIM will have the majority and controlling shareholding interest in Independent Newspapers, with the GEPF holding 25% and the Chinese Consortium possibly having a minority interest of 20%, ensuring that INMSA is firmly in South African hands.

Additional titles in the INM stable includes the Daily Voice, Pretoria News, Sunday Independent, the Sunday Tribune, the daily Zulu language newspaper, Isolezwe, as well as separate Saturday and Sunday editions of Isolezwe.

In addition to newspapers, INM publishes three leading Condé Nast international magazine brands: House & Garden, GQ and Glamour.

Dr Surve said he believed strongly in the future of print media in South Africa, especially among the growing number of community titles and as literacy rates increase. “This is the beginning of a strategy to invest in newspapers across Africa, and to focus on developing digital and other cross-media opportunities.”

More on SA media

Sekunjalo eyes digital media expansion

SA media arm set for R2 billion sale

Bids for SA media arm short by R1.18 billion

Break Independent up: SACP

The billion rand bid for Independent

Independent confirms possible sale: report

 

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Sekunjalo INM purchase takes shape