Malesela Holdings No I (MH1), a subsidiary of Community Investment Holdings (CIH), will acquire Jasco Cables’ 51,1% shareholding in Malesela Taihan Electric Cable (M-Tec) for an aggregate purchase price of R60-million.
This follows the 2013 announced that Jasco Electronics management would take decisive action of its investment in M-Tec if there was no improvement in performance and subsequently placed the investment under review.
As a result of M-Tec’s sustained poor performance, Jasco Cables entered into discussions with Taihan Electric Wire, which owns the remaining 48,9% interest in M-Tec, regarding a process for the disinvestment by Jasco Cables of its interest in M-Tec.
Due to subsequent unexpected changes to the executive management at Taihan during November 2013 all negotiations were delayed and the disinvestment process effectively placed on hold, but resumed again in July 2015.
The disposal of M-Tec is in line with Jasco management’s continued focus on addressing underperforming business units and exiting from non-core and low value-adding businesses.
In addition, the group will benefit by utilising the proceeds from the transaction to strengthen its balance sheet, reduce its interest cost, and free up significant executive management time to focus on the core operations of Jasco.
CIH is a 100% black–owned investment holding company that was established in 1995 by Dr Anna Mokgokong and Joe Madungandaba. CIH has significant interests in the healthcare, ICT, logistics, mining, infrastructure, power and energy sectors. CIH is currently a major shareholder of Jasco through its direct and indirect holding (through Afrocentric Investment) of 17,6%.
M-Tec is a manufacturer and supplier of non-ferrous products in South Africa including power cables, aluminium overhead conductors, bare copper wire, strip products as well as optical fibre cable.