SOUTH AFRICA – The National African Federated Chamber of Commerce and Industry (Nafcoc) appears to be split over the planned acquisition of the Gallagher Convention Centre inMidrand, north of Johannesburg.
The proposed asking price of R500m, some Nafoc members deem, is too high.
South Africa’s City Press reports the intention had been for Nafcoc to use the R500m worth of preference shares it holds in hotel and casino group Tsogo Investment Holdings to acquire the Gallagher centre from Hosken Consolidated Investments (HCI), also a Tsogo subsidiary.
Daniel Mbuli, spokesperson for one Nafcoc faction, said the deal meant that HCI would exchange the R500m worth of shares for the convention centre, which he said was worth only R390m.
“Nafcoc is being ill-advised,” he said, “because HCI will get a discount of R110m for the chamber’s shares.”
Nafcoc trusts currently receive R40m per year in dividends, which would end with the proposed deal.
Recent conferences hosted at the Gallagher Convention Centre have included the ANC Youth League, labour federation Cosatu and the Black Management Forum.
HCI’s plan to offload Silver Vanity Investments, the investment vehicle which owns the Gallagher centre, comes after a 2005 ruling by the Competition Tribunal which stated that it was anti-competitive for HCI to own both the Gallagher and Sandton convention centres.
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