The Welkom Yizani shares are set to list on an over the counter (OTC) trading platform this morning, allowing investors who bought in to the Media 24 BBBEE scheme to trade on their shares. The listing also opens up space for new investors to come in.
All eyes will be on the price at which the Welkom Yizani shares will trade. Investors who went in at R10 per Welkom Yizani share will be hoping for pay day via a price that is far above R10.
When Welkom Yizani shares were launched in 2006 about 107 000 investors participated. They paid in R10 per Welkom Yizani shares but earned shares with fair value of about R50 per share. They were subsidised to the tune of R40 per share through Naspers loan funding.
As such the price of Welkom Yizani shares will be partly a function of how effective has the scheme serviced its debt and how much value has been created by the underlying asset, Media 24. The price should also reflect expectation of future dividend flow. Another critical factor will be the liquidity of the share, the volume of trading. The liquid, the more traders there are, the better for investors.
Welkom Yizani was established in 2006 to take a 15% stake in Media24, a print media bias business and subsidiary of globalising media giant Naspers. Media24 has produced fair financial performance over the years, which shows growth in profits and steady flow in dividends despite tough trading environment. In the year ended March 2013 Media 25 recorded
Most recently Welkom Yizani received an interim dividend of R141.5 million which will be shares among investors after attending to debt obligations. Previously, for the twelve months ended March 2013, Welkom Yizani declared a dividend of 27.9 cents.