The day that Alan Gray looked as if it had settled its long-running dispute with construction company Group Five by replacing the board, out of the blue, the CEO of PPC, Darryll Castle suddenly resigned without any apparent explanation.
Both companies operate in the construction sector and have faced similar challenges.
As with Group Five, clouds of uncertainty hung over the share price of PPC, which took a hit of 13.7% to R4.22 on the day. It has since rebounded to R4.75.
But the fascinating story at PPC is that former Governor of the SA Reserve Bank, Tito Mboweni, also suddenly left his PPC board position only last week – again without explanation. What’s going on at PPC? Two key and well-known directors leave the PPC board instantly, and PPC does not say a word about why?
The market believes that PPC’s negotiations to take over fellow cement-maker Afrisam have sailed into turbulent waters, and both Darryll Castle and Tito Mboweni have bailed out. Is the Public Investment Corporation (PIC) pulling the strings, since the PIC owns 66% of Afrisam and is also the largest shareholder in PPC, with a 15% stake?
But what is totally mystifying about Group Five’s activities and whatever is happening at PPC, is that neither company has informed shareholders about what’s going on.
Yet listed companies are not owned by their management, but by their often millions of shareholders.
It’s all rather confusing. PPC has been driving a rocky road since last September. The company was heavily indebted and could not raise the billions it needed from the banks, and so went to shareholders with a R4 billion rights issue. That went off comparatively well, however, until the losses came and PPC became a dented vehicle.
Even after raising R4 billion, PPC still had its problems, namely a further R4.7 billion of debt.
Post rights issue, Darryll Castle was upbeat about PPC. This is what he said: “The business will continue to focus on mitigating economic and market risks in the regions we operate in, while continuing to optimise the group’s capital and cost structures. This should enable the group to compete efficiently and effectively in all our geographies.”
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.