Welkom Yizani BBBEE investment tragedy continues

The tragic story of more than 100 000 investors in Nasper’s BBBEE scheme Welkom Yizani continues with no solution in sight. Welkom Yizani shares were trading at R10.01 on the Friday, the 14th of February 2014.

The seven years old BBBEE investment scheme opened for trading on the 9th of December 2013. The share price has settled around R10.00 per share. This was a huge disappointment for investors who paid in R10.00 per share to participate in the scheme. This means investors who sold at R10 and some at levels below R10.00 have lost money in the scheme.

Many investors are seeing red and have been calling for an intervention of sought to infuse financial sensibility into the scheme but there is no sign of such an intervention happening.

Naspers has remained silent about the performance of the Yebo Yethu scheme. Government, in particular the DTI, has communicated a view that it has no legal ground to make an intervention.

Welkom Yizani is invested in Media24, a Nasper’s subsidiary with bias towards South African based print media assets. The BBBEE scheme was launched with a purchase of 15% of Media24 shares in 2006.

Black investors were invited to pay in R10.00 per Welkom Yizani shares and were subsidised to the tune of R40 per share via loan funding. The deal was structured to earn equity as the debt is paid down from Media24 dividend. Some dividend has gone into paying down the debt over the years which is said to have lifted Welkom Yizani net asset value to about R25.00 per share. But the market, the limited trading platform, has so far failed to recognise the net asset value.

news@ujuh.co.za

  • muzi emmanuel ndinisa

    l e-mail and everny fax my document to sell my shers, the thing i didn’t get any respond from you my id number is ….
    tanx muzi

  • All the more reason why it is in everybody`s interest to educate themselves about how the investment environment operates. Investing in shares involves risk & there is no guarantee of returns, instead there is a possibility of losing a portion or even all your capital. Some people have been known to have lost fortunes when the companies they had invested in could not continue to stay in business through various reasons. That is why diversification is absolutely important. There is a difference between an investment in shares and fixed deposits. The latter guarantees the investor`s capital plus a fixed return over an agreed upon period although it`s returns are not spectacular enough. In contrast in shares can be very rewarding as the case is with Naspers shareholders and a few other companies who have seen the value of their shares and dividends climb steeply.. As an investor in shares one is expected to monitor one`s investments and take an interest in the companies one is invested in so that should one feel that there is a possibility of the company going down, he/she should cut his/her losses by quickly selling. Another way is to put a stop loss on a particular share price before it`s downward spiral.

    In the past investing was a preserve of the rich & well remunerated individuals but that is no longer the case because of such investments as Unit Trusts and ETF`s which can be bought on a monthly basis
    requiring monthly stop orders some which can cost as little as R200.00 per month. These low amounts serve to highlight the fact that the majority of wage earners can no longer hide behind claiming to be unable to afford as their reason for not being Stock Market participants. There is a big concern in SA that South Africans are poor savers and that cycle can only be broken by active participation in the Stock Market which can be very rewarding at times.

    1. Correction,line no.8 should read “In contrast investing in shares can be very rewarding”

Leave a Reply

Your email address will not be published. Required fields are marked *