JSE pulls plug on Sagarmatha listing
Sagarmatha’s failure to submit its annual financial statements to the Companies and Intellectual Property Commission (CIPC) was behind the JSE’s decision not to allow it to go ahead with a proposed listing on Friday.
On Wednesday, the company was due to announce the results of a private placement ahead of the Friday listing. However, instead of this announcement, shortly after 6pm the company released a Sens statement, saying that the JSE had decided the listing could not go ahead.
“Regrettably, therefore, due to the JSE’s decision the company cannot continue with the listing on April 13,” said Sagarmatha, which described the JSE’s decision as disappointing.
Sagarmatha’s announcement to the market came more than 24 hours after the JSE told it the listing could not go ahead. No explanation is given for the delay in informing the market of the critical development.
In a letter to the company sent on Tuesday, the JSE explained its reasons for prohibiting the listing.
The company did not submit its annual financial statement to the CIPC at the time when the prelisting statement was approved by the JSE.
This represents a contravention of the Companies Act and therefore of the JSE’s listings requirements.
The JSE said that it was not aware the annual financial statements had not been submitted to the CIPC when it approved the prelisting statement.
Sagarmatha said it received confirmation from the CIPC that it had submitted its financial statements on April 11.
It noted that the financial statements had been included in the prelisting statement and had therefore been in the public domain since late March. Sagarmatha had also failed to release its results for the 12 months to the end of December 2017 by April 9, as had been requested by the JSE.
The results were released on April 10, just hours before the private placement was due to close.
JSE CEO Nicky Newton-King said they had no option but to prohibit the listing when they discovered it was not in compliance with requirements. “When a company applies for a listing it’s required to confirm it’s in full compliance with all its statutory obligations — one of which is compliance with the Companies Act, which requires submitting financials timeously,” said Newton-King. She said the listing had been granted on the wrong assumptions.
Sagarmatha, which is the Nepalese name for Mount Everest, was targeting a minimum subscription of R3bn and a maximum of R7bn. The JSE had previously said that the listing could only go ahead if Sagarmatha made the R3bn minimum target.
Sagarmatha’s stated plan was to become the largest technology platform company on the continent.
Ahead of the listing its businesses include news wire agency African News Agency, online retailer Loot, online classified business IOL Property, online media business Independent Online and Sagarmatha Enterprise Solutions.
The listing on the JSE would have seen Sagarmatha acquire Sekunjalo Independent Media’s 55% stake in the Independent Media group.
Proceeds from the controversial listing were going to be used to acquire up to 15 new companies and grow the existing asset base.
In addition, Sagarmatha planned to repay R1bn of debt.