Cash-flush Remgro targets investments
The investment behemoth has about R6bn in its corporate coffers
Investment behemoth Remgro, which is controlled by the Rupert family, is once again cash flush with about R6bn in its corporate coffers.
Remgro has traditionally held on to a large cash pile as an insurance policy for dividends in leaner times. But in recent years the group incurred debt to back one of its biggest investments — private hospitals group Mediclinic International.
Year to end-June results issued on Wednesday showed Remgro in a near cash-neutral position with cash-at-the-centre of R13.7bn and debt-at-the-centre of R14bn.
But subsequent to financial year end the group banked R4.9m in proceeds from a recent sale of its significant minority stake in consumer brands giant Unilever, and sold its investment in Chinese focused Milestone Capital Strategic Holdings (MCSH) for $70m (about R1bn).
Remgro CEO Jannie Durand said the group, which holds stakes in banking conglomerate RMB Holdings, Mediclinic International, insurance cluster RMI, liquor group Distell and household brands specialist RCL Foods, was actively looking for new investment opportunities.
"Price expectations, however, are still quite high. We know that we have to get the entry price right."
Although it was a fairly quiet period for Remgro, there was a further R324m invested via a rights issue in Community Investment Ventures Holdings, which houses arguably Remgro’s best unlisted investment, Dark Fibre Africa.
Part of the R11.9bn Unilever transaction saw Remgro acquire the household "spreads" business — including brands such as Stork, Rama and Flora — for an effective R7bn.
The spreads brands have been transferred to a new Remgro subsidiary called Silver 2017 Propriety. Speculation suggests Remgro will transfer these brands to subsidiary RCL Foods, which owns poultry and other food brands.