Investment group Labat Africa, which has announced it is venturing into the cannabis market, is likely to unbundle some of its subsidiaries to unlock value for shareholders.
In recent months, Labat quietly bought two entities, gas company Autogas and vehicle video-tracking business Real Chem, to expand its energy and logistics businesses respectively.
“We are in negotiations with other fuel distributors. We are working on one specific one that we haven’t concluded yet,” CEO Brian van Rooyen said.
Labat, which has been listed for 25 years, has battled to gain traction over the years. The group said its venture into the lucrative cannabis market may result in the unbundling and separate listing of some of its subsidiaries.
“Whoever is in Labat right now will be smiling to the bank because they will have their shareholding in the cannabis business and they will retain their shareholding in the Labat business. When we unbundle that either into a separate listing or a publicly unlisted company, they will have value in both of the entities of Labat,” said Van Rooyen.
Last week Labat unveiled plans to establish a fully integrated cannabis business and aims to “occupy and service the entire value chain of the cannabis market”.
It acquired a 70% stake in a Lesotho cannabis grower and manufacturer, Zarenka Group. The remaining 30% will remain under current shareholders Luxolo Vava and Mohammed Osman.
It also bought shares in seeds and genetics business Knuckle Genetics and packaging company Pac-Con, which manufactures and packages liquids, tablets, capsules, creams and gels.
“Pac-Con will be used to produce high-grade CBD (cannabidiol) oils and related cannabis products for the retail and wholesale markets,” Labat said.
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