IFA Hotels & Resorts SA said on Friday it was "not averse" to increasing its free float of shares but this would be done in a "measured way".
IFA SA was formed when the parent company, IFA Hotels & Resorts in Kuwait, reverse-listed two South African units into JSE cash shell Moribo Leisure in February. IFA SA owns Zimbali Lodge and half of the joint venture developing the Zimbali Coastal Resort.
IFA Kuwait owns 85% of IFA SA, which has resulted in only 15% of the shares being held by outside shareholders. This has a negative effect on liquidity.
But Phillip de Sylva, vice-president of operations for IFA SA, said on Friday that the rationale behind IFA SA's listing had not been to increase liquidity but to gain a foothold in SA and raise its profile so it was more attractive to international investors.
A JSE listing included strict corporate governance structures and was perceived as less risky by investors.
De Sylva said there was no "immediate plan" to increase IFA SA's liquidity.
"We are only going to increase our free float in a measured way. The opportunity for increasing the free float could be achieved in the acquisition strategy," he said.
But De Sylva said the company did not want to increase the free float of shares until it was happy it was being "done at the correct value".
"We are trading at R3,65 and we believe the shares are worth more, so we wouldn't rush and increase the free float at that kind of price," he said.
IFA Kuwait has a free float of 45%. "These are shares held by outside shareholders, so we are not averse to having a higher free float. But it has to be increased in a manner which does not detrimentally impact on the value of the share," said De Sylva.
IFA SA is pursuing an aggressive acquisition strategy.
In June the company said it had acquired a 9,25% interest in the 2400ha mixed-use Boschendal estate in Western Cape for R53,9m. The group owns a 19,25% share in the estate.
This was the group's first foray into South African real estate markets other than KwaZulu-Natal. De Sylva said the company was trading under a cautionary notice, so he could not elaborate on its other plans.
Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge
