Following the announcement by Johnnic Holdings Limited ("Johnnic") last week that it would, subject to shareholder approval, seek to unbundle its 62.5% shareholding in Johnnic Communications Limited ("Johncom") in February 2005, the Board of Johncom met Monday to consider Johncom's response.
The Johncom Board supports the restructuring proposals put forward by Johnnic and welcomes the opportunities and challenges which will result from Johncom becoming independent from its controlling shareholder of many years.
The unbundling raises a number of issues, not least of which will be the empowerment profile of Johncom going forward. The Johncom Board agreed:
The Board assumes full responsibility for ensuring that an appropriate black empowerment shareholding is achieved in the short term, and will be in a position to make a proposal to shareholders for their consideration in due course. Johncom will now be appointing professional advisers to work with management and the Board to devise this strategy. This empowerment shareholding will be critical to ensure long-term value creation.
It is committed to delivering shareholder value and growth through its well-entrenched strategy of operating as an integrated entertainment and media company.
It will continue to focus on shareholder value creation and in this regard, it is significant that Johncom's interim results (published last month) have shown a 727% increase at headline earnings level.
In the long term, the Board believes that superior returns can be generated by the ongoing implementation of this integrated entertainment and media strategy.
The Board is not currently contemplating any changes to Johncom's core businesses, management or the Board, but will continue to evaluate all its businesses to ensure they are performing optimally and that they are strategic to the group's continued growth.
It is imperative that staff, customers and all of Johncom's stakeholders be assured that the corporate activity around Johnnic will not impact on Johncom or its businesses in the short term.
