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Ikageng's hopes for share plan run high
EMPOWERMENT
JOHNNIC is optimistic that its Ikageng share offer will bring an estimated 30 000 new black investors into the company. Hazel Ralefeta, chairman of the share scheme, says the Ikageng roadshows have proved a success, although she cannot provide subscriber figures. The scheme, which opened on April 22, has made available 2.7-million Johnnic shares through Ikageng to blacks (Africans, coloureds and Asians) as an "exercise in real grassroots empowerment". The shares are available in blocks of 50 at R66 a share. Subscribers are required to put down a deposit equal to 10% of the share price of R66. The new shareholders will forego dividend and voting rights for three years - after which the balance becomes payable. So far the roadshow has hit six cities with "positive results". Still to come are nine cities including Kimberly, Durban and Johannesburg ahead of the Friday June 6 closing date. By then Johnnic hopes new black shareholders would have been lured into the JSE for the first time. M-Net's Phutuma share scheme, on which Ikageng is modelled, wooed about 7 500 new black investors - although the scheme is small in comparison with Johnnic's. There are difficulties ahead, not least of which is to convince people who have not previously participated in the stock market that it is safe, but also risky. "In presentations, we explain upfront to potential investors how the market works and the risks involved," said Ralefeta. There are other risks, against which the Phutuma shareholders were cushioned. There is the possibility the share price might dip well below the R66 level, despite assurances that from Johnnic that the price will increase. What then? "The option then would be to discontinue the scheme, in which case shareholders would forfeit their 10% deposit," said Ralefeta. The National Empowerment Consortium, which has first option to buy these shares, could then discuss with Anglo American what to do with them.
Second, the share offer could be undersubscribed. "In that event, Anglo American would retain the non-subscribed shares," said Ralefeta. The offer closes on June 6 and applicants will be told within three weeks how many shares they have been allotted.
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