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Wesizwe subject to takeover speculation
Firing of chief executive and ex-chairman stoke talk
November 5, 2009
By SLINDILE KHANYILE
Wesizwe Platinum's decision to remove chief executive Michael Solomon and former board chairman Robert Rainey signalled the company might be a takeover target, Percy Takunda, a resource analyst at Imara SP Reid, said yesterday.
Takunda said the decision indicated the company was headed for some degree of corporate action, although he could not explain more. Wesizwe issued a cautionary towards the end of last month which is still in place.
"Obviously, there is some degree of corporate action there. It could be a merger or an acquisition but I could not really say for sure what is going on. But if you put two and two together, that is what it points to," Takunda said. "Wesizwe has been trying to raise capital for some time now but it has not been successful. Conditions in the markets have changed."
There has been speculation that Wesizwe could be taken over by Impala Platinum.
Wesizwe board chairman Iraj Abedian said lawyers for both parties were in discussions to conclude the matter. Abedian would not disclose the reasons for dismissing Solomon and Rainey, who was now a non-executive director, from the mining firm, citing that the issue was sub judice.
Abedian said the company hoped to finalise the decision in the next six to seven days.
Solomon and Rainey have challenged the decision.
Abedian said the company had made an undertaking not to remove the two from the board until the matter was settled.
"They remain in limbo until the court decides. We are waiting for the lawyers to tell us if it has been settled or if it will heard in court," said Abedian.
Financial director Nyasha Tengawarima is the acting chief executive.
Abedian said the changes would not impact on Wesizwe's daily operations as it was not yet operating as a mining producer.
Solomon yesterday would not be drawn on whether he wanted financial compensation or to be reinstated, also saying the matter was sub judice.
He said that they were challenging the decision as the notice was not referred to the shareholders and it was only taken by four out of the seven board members. Solomon said this made the decision invalid.
"We believe the notice was given in bad faith and it is invalid. There were no reasons given for removing us."
Bakubung and Vunani Capital, two of Wesizwe's main shareholders with a 22 percent and 7 percent stake, respectively, said they could not comment because they did not know much about the decision.
The shares fell 3.6 percent to R187 yesterday. The platinum sector rose 2.82 percent.
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