Exiting Clover deal costs Brimstone R55m
The investment firm reports a R84.3m loss in the six months ended June 30
Brimstone’s decision to exit the consortium that wants to buy Clover has come back to hurt the black-owned investment firm as the decision was one of the factors behind its loss in the six months to end-June.
The company reported a loss of R84.3m, an improvement from a loss of R227.1m in the prior period.
“The current period loss is mainly due to the cost of the exit of the Clover transaction, increased finance costs, increase in valuation provisions at Lion of Africa Insurance Company and an increase in the tax charge,” Brimstone’s CEO Mustaq Brey said on Monday.
Brimstone said disposing of the right to subscribe for the Milco shares cost it R55m. It disclosed the amount in the balance sheet under “Other investment losses”.
Brimstone, the majority shareholder in Sea Harvest, was the original black economic empowerment partner in the Milco consortium that is on the verge of acquiring Clover.
But the company exited the consortium due to pressure from Palestine solidarity organisation BDS SA and trade union Food and Allied Workers Union (Fawu).
The two organisations slammed the participation of Israeli company Central Bottling Company (CBC) in the consortium, also known as Milco.
In the six months, Brismtone’s intrinsic net asset value decreased 5% to R3.7bn from R3.9bn at December 31 2018.
Brimstone increased its stake in associate Oceana Group from 17% to 22.9% in the period by acquiring 8 -million shares for R581m.