Who is buying into AYO?

Almost everyone who has acquired a significant number of shares in AYO Technology Solutions since its JSE listing in December is tied somehow to Iqbal Survé and his family’s Sekunjalo Investments, the ultimate parent of AYO.

The Public Investment Corporation (PIC) controversially decided to underwrite AYO’s entire private share placement before the listing with a R4.3bn injection, despite internal concerns that it was overvalued.

By now the company’s share price has settled at around R28, a drop of 38% from the R45 a share the PIC paid.

This means the PIC has lost R2.7bn from its AYO investment so far, which saw it take a 29% stake in the company.

An analysis of AYO shareholdings as of the end of July shows the shares have been acquired almost exclusively by people tied to Sekunjalo or AYO’s direct parent company, African Equity Empowerment Investments (AEEI). AEEI is in turn controlled by Sekunjalo.

Data provided by Iress and TimBukOne show the largest buyer of AYO shares has been Hunterhill Investments.

This company belongs to Selwyn Lewis, a former Sekunjalo director.

Four other former directors or executives of Sekunjalo – Keith Bethal, Mary Jane Morifi, Kevin Charles Patel and Yusuf Kajee – have also acquired significant numbers of shares.

Three entities belonging to the Altini family, who are significant AEEI shareholders, have also acquired noteworthy numbers of AYO shares.

This group makes up 10 of the 13 investors that have discernibly increased their shareholding in AYO.

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Another member of the 13 is the Communications Empowerment Consortium, which evidently was not buying shares on the open market.

Survé himself bought 2 000 shares through his 3 Laws Capital.

When City Press asked AYO about this support from related parties – and apparent complete lack of interest from unrelated investors – the company’s CEO, Kevin Hardy, declined to comment.

“It is not for AYO Technology Solutions to comment on who buys or sells the company’s shares,” Hardy said by email.

Before the investment, PIC staff had insisted that the state-owned asset manager should get insurance in the form of a put option from AYO.

This would have allowed it to limit losses by making AYO contractually obliged to buy back shares at a certain price.

This put option was, however, never provided.

The PIC had intended to invest several billion more into another Survé-related company called Sagarmatha Technologies when it listed this year.

This listing was scuppered after the company failed to provide the JSE with all the required information.