Big shareholder likely to follow rights

I wanted to add something to what Byron wrote yesterday in his piece on Curro - Making a profit, growing like crazy, but it only struck me whilst I was out having a jog/run (slow, sadly) this morning. Firstly, on the priority lists for parents, education of their kids ranks very, very high up the priority lists. If not at the top, very near to the top. Secondly and the main point was, watch the main shareholder of Curro, who is PSG. PSG Financial Services owns 101 729 366 shares, according to the 2012 annual report, but after the rights issues, there are now 294 794 391 shares in issue and the PSG holding is still 63.1 percent.


I don't think that the shareholding percentage there has changed much, so their (PSG) stake in Curro is worth 5.245 billion Rand. But PSG also own 28.48 percent in Capitec (shares in issue, around 115 297 995, PSG holding = 32.8 million shares). PSG's Capitec dividend (interim and final before that) after dividend tax was 5.168 ZAR or 169.7 million Rand. If Curro are issuing one for every ten (at 20 ZAR a share), then they (PSG) are going to have to pony up 372 million Rand of their own to not be diluted. Which can be covered by 4 dividends from their holding in Capitec.


And the most amazing thing out of all of this is that neither Curro, nor Capitec existed 16 years ago. Enterprise value of the two combined is an amazing 30.5 billion Rand. And to think that PSG "only" has a market cap of 18 billion Rand. The biggest shareholder BTW in PSG is Steinhoff, who own 19.6 percent. Many fingers in many pies, those fellows from Steinhoff. Make no mistake, both Marcus Jooste (Steinhoff) and Jannie Mouton (PSG) are champions of capital, and have been rewarded for their risk taking and company building and wealth creation. Nice. And lastly, need I remind you that SADTU members are voting soon about whether or not to embark on industrial action. Good for Curro, bad for poor people.