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Shares in debt-laden Tongaat Hulett surged 17,78 percent on Tuesday following an announcement that Artemis Investments, which is controlled by shareholder activists, had increased its shareholding in the JSE-listed sugar producer and property company to 10 percent.
Artemis has backed a group of minority investors disgruntled with the timing and size of Tongaat’s now abandoned R5 billion rights offer.
Tongaat closed at R4,77 a share, 76 cents higher than its previous closing. The stock is also more than 55 percent up in the past week, following the group’s decision to can the controversial capital raise.
Charles Liasides, a director of Artemis Investments, told Moneyweb on Tuesday the group previously held about an 8,5 percent shareholding in Tongaat, but “with recent developments it made financial sense to increase it to over 10 percent”.
Liasides said Artemis had increased its shareholding in Tongaat to over 10 percent in about the past two weeks.
He described Artemis Investments as a private investment company owned by a family trust that has joined forces with other shareholders to prevent the effective takeover of Tongaat. Liasides declined to comment on the quantum of investment made in Tongaat shares, other than to state: “The quantum is relatively small in the bigger scheme of things.”
He confirmed that the rationale for Artemis increasing its shareholding in Tongaat to 10% was to get a voice and to enable it to engage Tongaat’s management.
“We have had ongoing engagements with Tongaat Hulett throughout this period and obviously have been directly involved with the TRP (Takeover Regulation Panel) appeal process,” he said. The “recent developments” and TRP appeal process referred to by Liasides relate to Tongaat’s planned recapitalisation to reduce its massive debt being scuppered by a Takeover Special Committee (TSC) decision withdrawing the mandatory offer exemption previously granted by the TRP to the company. – Moneyweb
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