All shareholders of Welkom Yizani, the black economic empowerment (BEE) shares of Media24, will be receiving a net special dividend of 18c/share for the 2015 financial year to benefit from the listing of Novus Holdings. By Gugu Lourie
Welkom Yizani holds 15% stake in Media24, a print media dominated operation within the Naspers stable.
The board of Media24 will recommend that a R100 million special dividend be pay to shareholders, including Welkom Yizani, of the media firm at the annual general meeting to be held on Monday.
Welkom Yizani investors will receive a dividend of R3 million, resulting in each shareholder being paid 18c/share
“The board recommends the special dividend on a once-off basis. It is specifically recommended to allow the Welkom Yizani ordinary shareholders to share in the proceeds of the Novus Holdings listing ,” said Rachel Jafta, the chairperson of Welkom Yizani.
Novus Holdings, formerly known as Paarl Print, was listed on the JSE on 31 March 2015 after it was partially unbundling of into a separate operation. Media24 retained 66.5% shareholding in Novus.
This move have finally realise some cash for Welkom Yizani shareholders, who have only been benefiting from annual ordinary dividends.
However many Welkom Yizani investors had already lost patience and exited the investment at a loss.
The share price of Welkom Yizani is currently trading at R10.03 a share, a same level it has been trapped for years.
The stock shot up over the past few days to hit a high of R25.00 per share on 17 March 2015, but quickly retreated to its paltry levels of R10.00 a share.
Welkom Yizani shares had been trapped at R10.00 per share, which caused much consternation from initial investors. These investors paid in a subscription of R10.00 per share at the establishment of the scheme in 2006. Then the scheme’s shares were listed for trading on an over the counter platform on the 9th of December 2013. The shares were stuck at R10.00 for more than a year and at one point sunk to R3.50.
Currently, the are 14.6 million Welkom Yizani shares on issue value at more than R146 million.
Media24 has not had the best of times in the past few years as profitability suffered. This was largely a result of dwindling advertising revenue. This picture did not bode well for the heavily indebted BEE scheme.
Media24 is one of the largest media companies in the country with huge exposure to the struggling print media. Its assets include well known titles like City Press, Daily Sun, Beeld, Rapport and a host of knock and drops and magazines.
While the stock is trapped in the R10.00 range, Welkom Yizani shareholders will also share R4.3 million in ordinary dividends, which will result in each investors getting 25c/share in the 2015 financial year versus the same amount in 2014 financial year.
That said, media firms globally are in transition and Media24 is looking at new ways to create shareholder value even for its BEE scheme Welkom Yizani.
Traditional revenue sources are declining and many media companies are struggling to adapt.
Jafta explains: “Media24 was one of the forerunners in investing in new areas close to our core expertise and actively optimising our cost base. These new businesses are showing good results and while print and digital media remains at the heart of what we do, we are diversifying the company for future growth.”