VinPro sells KWV shares
2010-04-15
VINPRO, the representative organisation for wine producers, recently concluded a transaction by which it sold a number of its shares in KWV Holdings. The income will be used to settle short-term debt and maintain a healthy cash-flow, as well as to capitalise activities and further expand its service-rendering to producers. The transaction entailed VinPro selling a total of 4 million of its more than 5,9 million shares in KWV Holdings through mediation by Zeder Investments Limited (currently the largest KWV shareholder), thereby decreasing its shareholding from 8,55% to 2,8%. The value of the transaction amounted to R38,4 million. A large part of the proceeds from the transaction will be used to obtain an increased shareholding of 17% in Vititec, the industry’s main supplier of plant material, says VinPro’s executive director, Jos le Roux. “VinPro already owns 50% of Vitotec, with KWV as the equal shareholder, and the further investment will give VinPro a majority shareholding of 67%. Plant material “VinPro will also acquire a fixed asset from KWV via the transaction, namely the premises on which Vititec’s plant propagation unit is situated in Paarl (Labori et Picardi near Paarl Mall), as well as a portion of adjacent land. “VinPro not only believes that the investment in Vititec would be financially beneficial in future by investing in a productive asset, but that the transaction is also strategically important for the wine producers, ensuring a sustainable supply of quality plant material to the industry. “Moreover, Vititec’s long-term sustainability will be ensured through this transaction,” he added. VinPro views its remaining shareholding in KWV as an important long-term investment and is positive about the future of KWV. It believes that KWV’s recent corporate activities, as well as its improved cash-flow position and business optimisation, is starting to reap rewards, which will create substantial value for shareholders in future.
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