THE Sekunjalo Independent Media consortium and the Public Investment Corporation (PIC) had by Wednesday not yet handed over their loan agreement to the Competition Commission, raising a potential question mark over the R2bn takeover of Independent News & Media South Africa.
Control of the media group was due to be passed from Independent News & Media South Africa’s Irish parent, Independent News & Media, to the Sekunjalo Independent Media consortium on Thursday. This was according to a statement issued by Independent News & Media South Africa CEO Tony Howard on July 29.
Competition Commission spokeswoman Trudi Makhaya said on Thursday: "A condition of the merger was that the loan agreement between Sekunjalo and the PIC would be handed over to the commission within five working days of it being signed. We have not yet received a copy of any loan agreement." She said if the agreement was not handed over, the two companies could find themselves in breach of the Competition Act.
In terms of the arrangement, the Sekunjalo Independent Media consortium would take a 75% shareholding and the PIC would take 25% for R500m. A separate Chinese consortium would acquire a 20% controlling stake at a later date. This transaction is subject to a separate notification to the Competition Commission, although it has already extended a conditional approval.
The two Chinese investors, one with television interests, will have "negative control", as they have certain minority rights that allow them to materially influence the policy of the company in a manner similar to a person who can exercise "an element" of control.
Shortly after the approval was granted last month a source said the transaction was meant to be filed as one, but the bid and finance process timelines did not align, bringing about two separate transaction notifications before the commission.
"Sekunjalo Independent Media has indicated from the start that it was looking for foreign assistance, and had they been able to get their ducks in a row in time they would have filed one transaction."