The JSE has suspended trading in the shares of financially-stressed listed financial services company Afristrat Investment Holdings Limited.

The suspension of Afristrat, previously known as Ecsponent Limited, was announced on Friday. It follows the JSE last month advising shareholders that the company had failed to submit its annual reports for the year to end-March 2022 within the four-month period following its year-end, as stipulated in the JSE’s Listings Requirements.

The JSE had warned that Afristrat’s listing may be suspended if the company failed to submit its annual financial reports on or before 31 July 2022.

Afristrat said in a Sens update on Friday that as its audited annual financial statements are only expected to be distributed on or before November 30, the JSE had taken a decision to suspend trading in all securities of the company.

“The company expects trading in its securities to be reinstated once its annual financial statements, forming part of the annual report and incorporating the notice of the annual general meeting, is published,” it said.

Afristrat CEO George Manyere told Moneyweb last month that Afristrat would be unable to meet the JSE’s deadline.

“We will definitely publish I think some time soon but definitely not by July 31,” he said.

MyBucks 

Manyere said the reason for the delay is because the company has been “working on a plan to save the business of Afristrat because of the impact of the significant losses we suffered with MyBucks”.

Frankfurt-listed MyBucks SA, a microlender in several southern African countries, collapsed and is now in liquidation, resulting in almost all of the R1.5 billion investment by Afristrat in MyBucks SA being lost.

Manyere claimed last month that an R800 million claim against MyBucks has been launched in Luxembourg with the receiver, who is handling the bankruptcy process for MyBucks and civil claims litigation processes in Botswana and South Africa. The latter, aimed at recovering R250 million from the responsible former executives in the company and/or MyBucks, has already started.

Manyere stressed that it is critical to first clean up Afristrat’s balance sheet, and that the company is considering all the various options to improve the company’s liquidity.

“That is why we did announce that they will be approaching our remaining creditors and lender with a proposal to convert their debt into equity,” he said.

Shareholder reaction

Preference shareholders in Ecsponent in May 2020 agreed to a restructuring of the group that resulted in R2.3 billion in preference shareholder debt being converted into equity in the company.

Investors in Ecsponent reacted with anger to an article published by Moneyweb about Afristrat, previously Ecsponent, and its financial difficulties.

‘Unsuccessful investment’

Manyere said last month: “As we have communicated in the past, the investments were lost because of an unsuccessful investment and over-concentration of investment in MyBucks.

“The main investments were in South Africa and that is where the significant amount was lost and also quite a bit was lost in Botswana and Zambia.

“The past investments were obviously not successful and I think we have communicated that to all the investors and hence that is why we have engaged all the creditors to convert their investment into equity because we have to pretty much clean up the balance sheet and restart if possible.”