4 July 2012

Namibia: Stimulus Eyes Good Chunk of DMH

The trustees of the Democratic Media Trust of Namibia will sell Desert Trade Investments, a company that currently holds 50 percent shares in Democratic Media Holdings (DMH), to Stimulus Investments.

According to a statement signed by founding and first trustee of the Democratic Media Trust of Namibia, Dirk Mudge, Stimulus Investments is ideally positioned to present itself as a unique empowerment partner.

The existing 50 percent shareholding of Media24 is unaffected by the transaction.

Former politician Dirk Mudge and the late Dr Jan Spies created the trust in 1989 as a private charitable trust, for the benefit of the people of Namibia.

The trustees established Democratic Media Holdings in 1992, a printing and publishing media company, with Mudge as chairman of the Board, a position that he held until January 2008, when he retired at the age of 80.

His daughter, Chrisna Greeff, was appointed managing director of DMH in 1995, and then took over from him as executive chairman of the Board of Directors.

DMH currently publishes the Afrikaans daily newspaper Republikein, the German daily newspaper Allgemeine Zeitung and the English daily newspaper Namibian Sun. It owns Newsprint Namibia, which currently prints all Namibian newspapers, as well as commercial publications.

According to the statement, because of the isolation in which the company found itself in terms of technical knowledge, buying power on consumables and Afrikaans journalistic training and development, the Trust took the decision in 2007 to sell a 50 percent shareholding in DMH to Media24, an established publishing and printing company in South Africa.

Since the Trust has never received any dividends from its sole investment in DMH as all profits were re-invested in the growth and expansion of the company, and thus could not fulfill its obligation in terms of the Deed of Trust to serve the Namibian people with education, a decision was then taken to donate the proceeds from shares to Media24.

The proceeds were then donated to the Polytechnic of Namibia, with the wish that the donation be utilised to establish a media training facility. Since such a well-equipped facility already existed, and since the Polytechnic was in dire need of a hospitality training facility, the Trust agreed that its donation be utilised as the Polytechnic saw fit.

According to the Trust, it has successfully fulfilled its objective to serve the Namibian people and it is time for a new direction, thus it has taken a decision to realise its investment in media in order to concentrate its efforts in investing in broad-based technical and vocational training, in development projects and job creation among marginalised communities in Namibia.

A Scholarship Fund for technical and vocational training, and a Development Fund for community development through the establishment of sustainable projects will be established and funded by the Trust through the sale of its shares in DMH.

By so doing, Mudge as founding and first trustee of the Trust, will leave the legacy he pledged to the people of Namibia in 1989. He also started a process to broaden the board of trustees to make it more representative of the people of Namibia, and is currently having discussions in this regard.

Greeff, who will vacate her position as executive chairman of the Board of Directors of DMH on November 30, 2012, will take care of the management of the affairs of the Trust according to the Deed of Trust.

Stimulus Investments also confirmed that it has concluded agreements whereby, conditional to the approval of the Namibian Competition Commission, it intends to make an investment in DMH.

"Stimulus successfully raised N$250 million in 2011 with the intention to apply that capital in quality Namibian businesses and DMH is a prime example of that," the managing director of Stimulus Investments, Monica Kalondo, said.

According to Kalondo, Stimulus has invested in various Namibian businesses and the basis of any of its investment is that of a strategic investor with no operational involvement.

"This approach is particularly useful on the newspaper side of this transaction since maintaining editorial independence is key to any media outlet," she emphasised.

Once approval of the Namibian Competition Commission is obtained, Monica Kalondo and Rein van Veen will represent Stimulus on the Board of DMH.

Stimulus will appoint an additional two independent, non-executive directors of its choice to ensure that the Board enjoys the benefit of diversity and a balanced combination of strategic skills.

The Media24 appointees will not be affected by the transaction. Stimulus is a Namibian investment company focused on investing in established, successfully operating Namibian companies.

The bulk of the empowerment shareholding in Stimulus is apportioned between the Mukwamhalanga Tukondjeni Community Trust, the Disability Benefit Trust, the Vita Thom Scholarship Fund Trust and the Stimulus Trust.

With the exception of the Stimulus Trust, all the trusts are independent from Stimulus, have independent trustees and are free to source additional funding elsewhere.

In addition to the above broad-based shareholding, Stimulus is majority owned and controlled by empowerment individuals and entities, with a wholly owned Namibian business, Pointbreak, being a substantial minority shareholder.

The individual shareholders in Stimulus are Sisa Namandje, Wilhelm Shali and Monica Kalondo.

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