Iqbal Survé hatches Sagarmatha to erase mountain of debt

EDINBURGH — Iqbal Survé, the boss of the Independent Media group, has pushed ahead with ambitious plans to list a reformed media and e-commerce company on the Johannesburg Stock Exchange. He intends to attract so much interest in Sagarmatha that he will give media giant Naspers a run for its money and get his new entity into the Top 40. Survé’s news operation IOL has painted a rosy picture of Sagarmatha, quoting US businessman Jim Rogers likening Sagarmatha to Amazon, Tencent and Alibaba. Competitors are more sceptical, questioning whether Rogers has really invested in Sagarmatha and underscoring the company’s mountain of debt. Sagarmatha is the Nepalese word for Mount Everest. The below piece was first published on Ince Connect. – Jackie Cameron

By Stephen Gunnion

The listing of the e-commerce and media group is scheduled for next week but the market has questioned what it offers.

The JSE is scheduled to get a new media and e-commerce listing next Wednesday but a number of questions have been raised about the quality of assets that Sagarmatha is bringing to market.

Iqbal Survé, head of Independent Media Group.

The group will list on the JSE’s media sector if it can raise a minimum of R3 billion. It hopes to raise R7.5 billion, however, in a private placement with institutions at R39.62 a share, valuing it at just under R50 billion. It describes itself as a “multi-sided African platform technology group with aspirations to become the emerging market leader in the Fourth Industrial Revolution” and has a portfolio of 14 businesses including African News Agency and e-commerce retailer Loot.co.za, among others. It will acquire 100% of Iqbal Survé’s Sekunjalo Independent Media ahead of the listing, giving it a 55% interest in newspaper publisher Independent Media, which owns titles including The Star, Sunday Independent, Cape Times and Mercury. The listing will reduce Sekunjalo Investments’ stake in Sagarmatha to around 60% from 73%.

The group is headed by joint-CEOs Grant Fredericks and Gary Hadfield and is chaired by Paul Lamontagne. It says early investors include Jim Rogers, co-founder of the Quantum Fund hedge fund and Harold E. Doley Jr, who has been a member of the New York Stock Exchange for 34 years, as well as trade unions. Strategic partners it claims include British Telecoms, Coriant, Nokia, Saab Grintek Technologies and Siemens. It plans to use the proceeds from its IPO to pay down debt of R1 billion, open new regional offices across the continent and scale up its business.

While it has given no details of its 2017 financial performance, it reported a loss before tax of R35.9 million in its 2016 financial year on revenue of R188.4 million. It didn’t pay any dividends in the three years up to 2016.

If it achieves a market capitalisation of R50 billion, it would be the second biggest media and e-commerce company on the JSE after Naspers and would be eligible for inclusion on the Top 40 Index, outranking recent entrants TFG Group, Truworths, Spar and Imperial Holdings.

Here’s the pre-listing statement.

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