By Hilary Mare
LISTED private equity entity, Stimulus Investments Limited, has issued a cautionary announcement to its shareholders regarding trading of shares highlighting that there are negotiations in place that could improve the firm’s securities.
Pointbreak Group Chief Executive Officer, Josephat Mwatotele who was enforcing a cautionary announcement for the sixth time since June last year on the Namibia Stock Exchange (NSX) called for caution when dealing in the company´s shares.
“Further to the cautionary announcements dated 28 June 2016, 12 August 2016, 23 September 2016, 25 October 2016 and 21 December 2016, shareholders are advised that negotiations are still in progress which, if successfully concluded, may have a material effect on the price of the company´s securities. Accordingly, shareholders are advised to continue exercising caution when dealing in the company´s shares until a further announcement is made, “he said.
Pointbreak is responsible for the management of Stimulus, recognised as the forerunner in private equity in Namibia. The Stimulus portfolio includes investments such as Cymot, Plastic Packaging, Namibia Media Holdings, Walvis bay Stevedoring, Joe’s Beerhouse Properties, Nashua and Neo Paints. Assets under management amount to N$381 million and were valued at more than N$530 million as at February 29 2016.
Stimulus assets have not been spared by Government’s decision to implement fiscal consolidation over FY2016/17 owing to a decline in overall revenues and rising debt concerns, as export demand remain subdued.
Minister of Finance Calle Schlettwein stated that the theme for Namibia’s FY2016/17 budget was ‘towards pro-growth fiscal consolidation’, in line with the Government’s record of fiscal prudence. The budget was reduced by 1.6 percent from N$67.08 billion in FY2015/16 to N$66.00 billion for FY2016/17 due to concerns about rising debt levels as well as lower than expected growth in revenue. There is a focus towards cutting back spending on non-essential operational items such as materials and supplies, subsistence travel, overtime, furniture, office equipment and vehicles.
Last week, Mwatotele was quoted in a local weekly saying: “We realised that prevailing economic conditions this year will be particularly challenging. As our investees are spread across most sectors, our overall portfolio is likely to be impacted by the broader difficult macroeconomic conditions. We, however, have confidence in our management teams to steer the ship against the expected headwinds. We expect that each of the individual companies will find the best strategies to cope and hopefully also create opportunities out of the challenges that they may encounter.”
Stimulus Investments Limited is a Namibia-based private equity investment company. It focuses on acquiring interests in established, high cash yielding businesses in Namibia, as well as targeting other private equity opportunities in promising businesses with potential to deliver high returns. The company’s management function is provided by Stimulus Private Equity (Pty) which last year raised N$138 million from the commitments made in June is reported to have already drawn down around N$121 million of that money and channelled it towards new investments.
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