CAPE TOWN (Business Day) -- A deal publicised last December in which JCI [JSE:JCD] and Randgold & Exploration [JSE:RNG: Nasdaq:RANGE] were to sell a R1.4 billion ($223 million) portfolio of assets to a well-placed black consortium, Orlyfunt Holdings, has not happened, JCI confirmed earlier this week.
There has been no announcement to shareholders on the status of the deal. JCI's new financial director Chris Lamprecht said through company spokes-man David Barritt that the deal is not completely off - aspects will go ahead.
Former JCI CEO Brett Kebble, who played a key role in setting up the Orlyfunt deal, resigned as CEO on Tuesday.
Because the deal has not been completely dispensed with, the previous management team at JCI did not consider it necessary to make a JSE announcement, Barritt said.
The deal would have given JCI and Randgold & Exploration a 40% stake in Orlyfunt and boosted Orlyfunt's asset base to R1.6 billion.
Orlyfunt would have taken over assets including JCI's stake in Letseng and the Boschendal wine estate, but these assets are now going into the new special purpose vehicle refinancing JCI.
The deal would have helped JCI and Randgold & Exploration meet the requirements of the Mining Charter.
"It is intended that Orlyfunt, on its own or in conjunction with other black economic empowerment groupings, will list on the JSE in due course, resulting in subsequent substantial cash inflow to JCI, thereby reducing JCI's debt and degearing its balance sheet," the company said last December.
That the deal has not been concluded raises questions about Orlyfunt's structure and finances - such as whether Orlyfunt used the JCI and Randgold assets as security for financing other deals.
Orlyfunt's website lists these assets - Western Areas, Matodzi Resources, JCI, Letseng Diamond Mine and Boschendal Wine Estate - as its own.
Orlyfunt MD Sello Rasethaba said Orlyfunt would hold its annual general meeting next Wednesday and would make an announcement afterwards.
According to corporate governance principles, he could not give out information before he had consulted shareholders, he said. He could not say whether the assets were used to raise finance for other deals.
Orlyfunt includes some powerful African National Congress (ANC)-aligned individuals and the connection with the Kebble family interests in JCI and Randgold & Exploration has boosted the Kebbles' political standing.
Orlyfunt's directors include Andrew Mlangeni, Lunga Ncwana and Thuthukile Skweyiya. Mlangeni is a veteran ANC member, Ncwana is an ANC Youth League member and Skweyiya is the wife of Social Development Minister Zola Skweyiya. Sharif Pandor, husband of Education Minister Naledi Pandor, is also a member.
Orlyfunt has concluded other transactions outside the JCI and Randgold & Exploration deal, some of which predate it. It has a 25% stake in Mediterranean Shipping, a 100% stake in hydraulic and loading systems group Palfinger SA, and recently bought a stake in advertising agency Saatchi & Saatchi from Rofara Investment Holdings.
