Ayo’s cash conundrum – can it pay back PIC billions?

Iqbal Surve Picture:Lerato Maduna
Iqbal Surve Picture:Lerato Maduna

Ayo Technology Solutions will in all likelihood be unable to repay the R4.3 billion it got from the Public Investment Corporation (PIC) in a controversial investment in December 2017.

Business Day this week broke the news that the PIC had been instructed by the Companies and Intellectual Property Commission (CIPC) to recoup the money, which should not have been invested to begin with.

The PIC cash was life-changing for Ayo, its parent company African Empowerment Equity Investments (AEEI) and the ultimate majority owner of AEEI, Iqbal Survé.

While Ayo has failed to use the money as intended when its flagship deal seemingly collapsed, it also does not have all the money at hand any more.

The main source of income for the company since the investment has been interest earned on the PIC’s money.

Ayo earned R225 million interest on the R4.3 billion while actual operations lost cash.


City Press previously reported how, despite this, Ayo paid out R100 million in dividends – money derived entirely from interest on the PIC cash.

This mostly went to the majority shareholder AEEI, which is controlled by Survé.

Other uses of the PIC cash included repaying a R77 million shareholder loan – to AEEI.

Another use of the PIC cash was paying transaction fees related to Ayo’s listing on the JSE of R78 million.

Most of this – R57 million – also went to AEEI via a subsidiary called AEEI Corporate Finance.

All told and excluding the dividend, this left Ayo with the same R4.3 billion in the bank at the end of August last year.

Since then, it paid the R100 million dividend and has committed R300 million to the acquisition of Sizwe IT Africa – a deal it suspiciously snatched from under the nose of a black consortium funded by the Industrial Development Corporation, as first reported by City Press earlier this year.

The CIPC has not responded to City Press’ questions regarding the compliance notice, but, according to Business Day, the notice stems from the PIC’s bizarre decision to invest R4.3 billion in a company “that at no time in its history had realised a turnover of more than R12 million”.

Ayo has denied this, and its prelisting statement produced in 2017 showed far higher revenue in 2015, 2016 and 2017 of nearly R500 million.

This means that either the CIPC is way off the mark or Ayo hugely misrepresented its revenues to potential investors.


City Press has tracked trading in Ayo shares since last year using JSE data on shareholding at the end of each month to show that they are mostly being bought by Survé.

Now Survé’s brother-in-law, Khalid Abdullah, has joined in.

In January, a newly activated shelf company, Kata Strategic Investment, with Abdullah as a director, bought 145 000 Ayo shares – the vast majority of trading in the share.

Strangely, Abdullah’s co-director in the new company is Leo Altini, a longtime business associate of Survé’s.

The shares were evidently bought from another company – Miramere Investments – with Altini as the sole director.

In effect, Altini is selling Ayo shares to himself.

The JSE data show that, up to January, the majority of trades in Ayo shares have been made by companies controlled by Survé himself.

Survé has told City Press that he sees value in the share and that there is nothing untoward about buying shares in the company he is already the main, indirect, owner of.

His trades have, however, also been instrumental in maintaining Ayo’s share price at a level it would otherwise be unlikely to maintain.

Even then, the Ayo share price has fallen from the R43 per share the PIC paid in December 2017 to R17.99 this week.


The PIC has technically lost R2.5 billion on the investment, but this remains what is known as an “unrealised loss” until it sells the shares.

The PIC has previously confirmed to City Press that it has a downside protection agreement in place with AEEI, which would result in AEEI paying a penalty if the Ayo share price fell below a certain, unknown level.

A draft of this agreement in City Press’ possession set this level at R26, which, if correct, would have already triggered the penalty.

It is, however, uncertain if this trigger level was reduced in the final deal.


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