Brimstone Investment Corporation has announced the sale of a portion of its shareholding in Lucky Star owner Oceana, disposing of nearly 12-million shares for R633.4m as part of a portfolio rebalance aimed at strengthening its balance sheet.
The company said yesterday that the deal will see its wholly owned subsidiary, Newshelf 1063, sell 11.95-million Oceana shares to Marine Edge Capital at R53 per share. The transaction carries no conditions precedent and is expected to take effect on about December 10.
According to Oceana, once the transaction is completed, Brimstone’s shareholding will drop from 25.2% to 16%, with the purchaser taking up a 9.2% interest.
“Over the past three years, Brimstone has consistently communicated its commitment to restoring shareholder value through debt reduction, disciplined cost management and share repurchases.
“This disposal of a part stake in Oceana represents a significant step toward executing our strategy of selected asset disposals and debt reduction. I am confident that our shareholders will welcome this progress,” Brimstone executive chair Fred Robertson said.
According to Brimstone, the sale follows a broader strategic review focused on realigning its long-term investment portfolio. The proceeds will be used to reduce funding obligations in the near term, it said.
Marine Edge Capital is a South African consortium with 51% black ownership, comprising entities active in the fishing industry, including Silverfin Fishing Company and Blue Fin Investments. Brimstone said the buyer has committed to maintaining its empowerment status for at least two years after the deal closes.
The agreement includes provisions linked to Oceana’s recently declared final dividend. If the dividend’s last day to trade falls before or on the closing date, Brimstone will receive the payout, and the purchase price will be adjusted down. If the date falls after closing, Marine Edge will receive the dividend with no adjustment.
Oceana recently reported that its HEPS for the year to end-September fell 38.4% to 564.8c, and a final dividend of 175c per share was declared, taking the total dividend to 285c, a decrease of 42.4%.
Brimstone has also agreed not to sell its remaining Oceana shares for six months after the transaction. Beyond that, for a 12-month period, Marine Edge will receive the first opportunity to buy any further shares Brimstone wishes to dispose of.
The sale relates to net assets valued at R1.03bn, with a profit of R42.1m attributable to those assets, according to Brimstone’s latest interim financials to end-June. The company said its intrinsic net asset value announcement in November placed Oceana’s market value at about R49.50 per share at the end of September.
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