Arivia stake under review

By Nicola Mawson for arivia.kom
Johannesburg, 24 Jul 2006

The future ownership of IT firm arivia.kom is the subject of a strategic review by majority shareholders Eskom and Transnet.

John Dludlu, commenting on behalf of the transport and freight utility, said: "The two remaining shareholders [Eskom and Transnet] are conducting a strategic review of the business. Once this is complete, we will unveil our disposal plans for this shareholding."

Eskom and Transnet acquired Denel`s 22.98% stake in April when it was reportedly divided 58:42 between the two State entities, adding to their previous stake in arivia.kom.

At the time, Transnet, which has a 42% stake in the IT company, had already embarked on a process of divesting of its non-core assets. Dludlu says: "Our future focus lies in owning and running freight rail, ports and pipeline assets. Therefore, our stake in this entity is part of our non-core portfolio."

In May, Dludlu said the process of divesting in arivia would take about 18 months, but has not indicated an updated timeframe. However, Dludlu did say the divestment would be "fair, efficient, orderly and transparent".

Transnet CEO Maria Ramos indicated previously, when announcing the sale of the V&A Waterfront, that all future disposals would be subject to strict conflict-of-interest guidelines, which had been adopted by the board.

Owned by the South African government, Transnet operates and controls the major transport infrastructures within SA. It has over R70 billion in assets and employs 65 000 people. On 4 July, it reported a 57% jump in profit from continuing operations to R8.5 billion off the back of revenue of R26.3 billion, a 7% improvement on the previous year.

Arivia has an estimated 7.8% share of the local market and about 1 600 employees. It reported R1.59 billion in turnover for the 2004/5 financial year, the latest figure available on its Web site.

Eskom spokesman Fani Zulu did not comment by the time of publication, but had previously said it would be unlikely Eskom would exercise its pre-emptive right to the arivia stake.