Torre: Big Cash Payment Possible For Shareholders

16 January 2017 | SA Views | Jeremy Woods: Out of the Woods
 


banner

chris

About 6 years ago, Charles Pettit (above), a virtual unknown to the JSE stock market, bought a controlling stake in SA French. SA French was heavily involved in selling cranes and a range of construction equipment, none of which was selling particularly well.

Several half-yearly results confirmed the worst. And some investors thought the unknown Charles Pettit might go down with the company. 

Not a chance. Charles analysed every segment of SA French, and finally turned it around. He then went on to buy Kanu (amongst numerous other businesses), subject of the current US$30,925,000 sale, and other investments that had the golden touch of a soon-to-be master in the making.

According to a small, select group of big money investors, Charles is believed to be one of the best dealmakers on the JSE, bar only one. (We dare not say who, but you all know who the Big Winner is!). And certainly, Charles’ latest contribution from SA Torre supports this observation.

Here is the deal: Torre recently disposed of its 55% stake in Kanu Equipment Ltd - a company that was originally acquired for less than $5,234,950 (EUR5m) - for a total of US$30,925,000, of which US$13,500,000 has been paid as a deposit towards the completion of the deal. The full potential of the deal is not yet showing in the share price, but it soon will be.

image1

The Torre board now have to decide what to do when this company becomes flush with cash. The options appear to be: pay a large dividend back to Torre shareholders, pay off some debt, or invest in new businesses, if there is one out there that attracts Torre.

Another fascinating aspect of Torre is that a major shareholder is Stellar Capital, where Christo Wiese is an anchor shareholder.

However Torre decides to utilise its cash, it will still benefit its remaining businesses which are all profitable, SA-focused and cash generative.

Perhaps, though it might be quite improper to suggest it, these businesses fit ideally into Invicta who are in the same area of business, and where Christo Wiese also has a big stake.

This could leave Torre a significant, cash-rich company amongst a number of companies offering good growth, high asset value, and low share prices. And with Charles behind the wheel, it could be another exciting ride for shareholders.

And if you want to get in on the action, now is the time to do it.


Jeremy Woods

Jeremy Woods trained for three years as a journalist on the Herts Advertiser, St Albans, in the U.K. Once qualified, he left England to work as a crime reporter on the Vancouver Sun in Canada. After three years, he worked for the Los Angeles Times as a trainee financial journalist, spending most of his time reading company accounts and finding publishable stories in them. He moved to South Africa and for the last five years in journalism worked for the Sunday Times, Business Times, as Investment Editor. He has also published a financial thriller called "Special Payments", which was a best-seller on publication, and optioned three times for a film.


Disclaimer:
The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.

Rate This Article

Your feedback is appreciated and helps us improve our content.

AVG RATING: 0

Thank you for helping us improve our content.

Rate This Article

Your feedback is appreciated and helps us improve our content.

AVG RATING: 0

Thank you for helping us improve our content.

Rate This Article

Your feedback is appreciated and helps us improve our content.

AVG RATING: 0

Thank you for helping us improve our content.