Speculation is afoot that the Sekunjalo consortium has won the bid to buy Independent News and Media South Africa (INMSA) and that the deal was signed in Cape Town on Thursday night, a source said. The Sekunjalo Consortium is reportedly led by Sekunjalo Holdings chairman Iqbal Surve, and includes two unions, a Canadian billionaire and a Silicon Valley billionaire as advisers.
Another source, at Independent Newspapers, as INMSA is more commonly known in South Africa, told The Media Online there had recently been a “flurry of activity”. But, said the source, whether this “seriously means the deal is done, I just don’t know”. The source said the news would not be surprising as “lots of stuff is happening, and the story is that the deal is poised to go through”.
Chairman of Sekunjalo, Iqbal Surve, responded to The Media Online, only to say “No comment”.
An earlier report in The Media magazine and on The Media Online pegged Sekunjalo’s bid at R2.4 billion but Business Report editor-at large, Ann Crotty, who with union MWASA put together a workers’ trust to try and buy 25% of the company, said last year INMSA’s results weren’t upbeat. “The weakness in INMSA was particularly striking at the operating profit level. In Rand terms, operating profit was down 34% reflecting operating margins of just 12.2% – a level not seen by INMSA in over a decade.” Operating costs increased by 5.4%, which was deemed a good performance “given inflationary cost increases in excess of 7% experienced across the board”.
But that is unlikely to hold sway with the Irish owners, who have a massive R4.2 billion debt to deal with. They want to squeeze as much money out of the possible buyer as possible to service INM’s debt. Reuters reported, “INM posted operating profit of €25.4 million in the six months to the end of June, 26% down on the previous year and well below the €155 million it made in the first half of 2007 before Ireland’s financial crisis hit the highly leveraged group hard.”
