Brait [JSE: BAT] is in talks with its biggest shareholder, Christo Wiese, about a broad debt-reduction plan at the investment company that could involve fund raising, cost cuts and asset sales.
Wiese’s investment vehicle Titan intends to remain “a significant and strategic shareholder,” Brait said in a statement on Monday. Titan has been approached by third parties who support the initiative, the company said. Brait’s shares rose by almost 4% on the JSE by lunchtime on Monday.
The disclosure follows reports last week that Wiese’s Titan would team up a new vehicle called Arbiter and Johannesburg-based money manager Mergence Investment Managers to remove the current management and embark on their preferred strategy, including selling Brait’s assets except for the gym-chain Virgin Active.
Brait would also raise R3bn in a share sale, according to an investor presentation seen by Bloomberg News.
The reports kindled a surge in Brait’s shares, which gained 11% over two days, valuing the group at R8.1bn. The stock is still down about 46% this year.
Brait has struggled with the challenge of owning embattled UK clothes retailer New Look, which it bought for 780 million pounds and now values at zero. The group's other assets include British grocer Iceland and South Africa’s Premier Foods, which makes Blue Ribbon bread and Snowflake flour.
Wiese was one of South Africa’s richest men before the near collapse of Steinhoff, in which he was the biggest shareholder. His net worth is about $628m (R9.5bn), according to the Bloomberg Billionaires Index. As part of the plan for Brait, Wiese would reduce his exposure by selling shares to Arbiter.
Brait is being advised by Rand Merchant Bank, a division of FirstRand.