African Phoenix Investments inflames investors
Preference shareholders are worried about the plan to buy back their shares at a huge discounts
Almost five years after African Bank Investments Ltd (Abil) stunned JSE investors with the suspension of its shares and the curatorship of its underlying banking business, its progeny, African Phoenix Investments (API), led by an entirely new executive team, looks set to stir things up again. API’s JSE-backed plan to buy back all 13.5-million of its preference shares at a huge discount to face value could set a precedent that will send a chill through preference shareholders across the JSE. The API executives are planning to buy back and cancel all of the 13.5-million preference shares issued by Abil in the 10 or so years before its spectacular implosion. But they don’t want to pay the R100 face value; instead, the company has offered R37.50, which it says is in line with what the preference shares have been trading at. The preference shareholders say the trading level is the result of the company’s failure to pay any dividends for the past few years as well as the board’s statement...
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