Cape Town - Shareholders of Welkom Yizani Investments received an unexpected boon when the board of directors announced on Monday that Naspers [JSE:NPN] has agreed to waive the preference share debt and accrued interest owed by Welkom Yizani.
The debt is valued at around R400m and will be waived on approval of the Welkom Yizani annual financial statements for the year ended 31 March 2016.
“We are delighted to share news of this windfall with our shareholders,” said Professor Rachel Jafta, chair of Welkom Yizani and Media24. “This is a significant concession by Naspers in a time when print media in South Africa, much like in the rest of the world, has been under pressure due to structural changes. This is a big boost for the scheme and means that Welkom Yizani will be debt-free.”
According to Media 24, Welkom Yizani is the biggest black economic empowerment share offer in South Africa’s print media industry. When Media24 launched the share offer in September 2006, it was three times subscribed with about 107 000 applications received for 14.6 million Welkom Yizani ordinary shares. These shareholders own a 15% stake in print media company Media24 Holdings.
“I couldn’t be happier for our shareholders. On behalf of Media24 and our shareholders I want to thank Naspers for this generous waiver. Media24 has excellent print brands; however, as print revenue continues its decline we must invest in our future which lies in digital media, e-commerce and online services," explained Media24 CEO Esmaré Weideman.
"Unlocking value for our shareholders is not something we could do in the short term as our investments will take time to show returns. This waiver of debt means that our shareholders can come along with us on the journey.”
In addition, the board advised that in the coming months there could be further developments that positively impact Welkom Yizani shareholders. It advised shareholders to act with caution in trading in Welkom Yizani shares.
Weideman said Naspers’ other share schemes for black South Africans - five since the 1990s - have yielded positive returns for their shareholders.
“I really hope this gesture has a similar effect for our Welkom Yizani investors,” she said.
To provide all shareholders with sufficient time to access and review the announcement, the board extended the suspension of trading on the Welkom Yizani trading platform until Monday 29 February 2016.
Shareholders who require further information are requested to visit this website or call the contact centre on 0860 12 12 24.
ALSO READ: Media24 restructures Yizani deal
* Fin24 is part of Media24.