They tend to steer away from emotion at SABMiller, the world class corporation which shaped Gavin Hudson who is leading Tongaat-Hullett’s rescue. So it’s instructive to read the latest annual report where Hudson describes the impact of his predecessor’s financial mismanagement as “devastating” and pushing the group to “the brink of catastrophe”.
The graph below showing Tongaat Hulett’s market cap in the past decade tells the story. When it comes to fallen angels, few JSE-listed companies come close. But after Tongaat’s success last month in the dispute on the sale of its starch business, there’s now a glimmer of light.
The net R5bn in cash from the sale of the business to Barloworld will cut the group’s debt burden by around half to R6bn. The annual report puts Tongaat’s property holdings alone as being worth R11bn. Deduct the debt and we’re left with property assets worth 5x the market cap – without the core sugar business.
Could Tongaat be shaping up as the ultimate turnaround opportunity? We’ll hear more from Hudson in the Rational Radio webinar at noon today. Register below.
For your attention today…
* In the Rational Radio webinar at noon today on Monday Gavin Hudson of Tongaat Hulett is in the hot seat. Professional money managers David Shapiro and Chris Logan will do the quizzing. It’s exclusive to Premium members. Here’s the link to register: https://attendee.gotowebinar.com/register/6730147365502274830
* Tomorrow at noon (Tuesday 6th) I’m hosting a webinar sponsored by our parters Sable whose experts will tell us about options on US emigration including via investing in property. To register: https://attendee.gotowebinar.com/register/4578371226056266255
* The third edition of our BizNews Digest PDF is now available for downloading. Be sure to use its “clickable” feature to unlock a teasure chest of audio and other resources. There’s also a last minute opportunity to squeeze into this week’s Joburg Mining Indaba. Here’s the link: https://bit.ly/34gK57B
* Episode Three of Inside Investing features the investment case for Barrick and Berkshire; Purple Group and Famous Brands; plus an update on the Kisby SME fund from Mark Barnes. Here’s the link to the audio and transcript:
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