TeleMasters delisting the start of a trend in South Africa

Mergers, Acquisitions and Financial Results

This article was posted by Editor on Dec 2nd, 2010 and filed under News, Top. You can follow any responses to this entry using RSS 2.0. You can also leave a comment below this article

Listed telecommunications company TeleMasters will ask for shareholder approval to delist from the JSE’s AltX board.

It could prove to be the first in a series of technology companies to delist from the alternative exchange, with Vox Telecom also said to be considering its options.

CEO Mario Pretorius holds 85% of the issued shares of TeleMasters. The remaining 15% are tightly held and poorly traded.

“The company does not expect to raise capital during the next couple of years and as a result the benefits of a listing are out of proportion to the management time and expense,” TeleMasters says.

The news of the company’s plan sent its shares up 14,6% in late-afternoon trading on Thursday.

TeleMasters listed in March 2007. However, it has never enjoyed trading volumes of any real consequence.

The company has paid a regular dividend to its shareholders since listing.

It has been mulling a delisting for some time and if shareholders agree to it, it appears the offer will be made through the Pretorius-controlled Maison d’Obsession Trust.

TeleMasters will take its plans to delist to shareholders at a special general meeting to be convened soon.

Other companies may soon follow in TeleMasters’ footsteps.

Vox Telecom is also rumoured to be planning to delist. The company is trading under cautionary, in terms of which investors are warned to exercise caution in trading in its shares.

Both Vox and Telemasters operate in least-cost routing, a market under pressure due to falling wholesale call termination rates — the fees that the mobile operators charge each other to carry calls on their networks.