Fund manager gains veto control over PPC

The Public Investment Corporation (PIC) has increased its stake in PPC Ltd, South Africa, to just over 25 per cent, the threshold required to gain ‘negative control’ over the country’s largest cement producer, according to a report in Business Day.

The PIC, which also controls 66 per cent of the second-largest player in South Africa, Afrisam, is now the able to block any significant transactions the PPC Ltd board seeks to pursue. Such transactions would require support from 75 per cent of shareholders.

This means an effective stalemate situation has arisen in the ongoing PPC-AfriSam merger saga, as more than 25 per cent of PPC shareholders have indicated they will oppose a tie-up with AfriSam and the PIC is now likely to oppose any transaction that does not involve AfriSam.

Investors had been waiting to see the terms of LafargeHolcim's non-binding proposal to combine its African assets with those of PPC.

Separately, PPC Ltd reported a 40 per cent increase in 1H17 profits, citing a robust performance in Zimbabwe and Rwanda and lower finance costs.