BSE suspends trading of Blue shares

Brian Benza
Staff Writer | Friday June 28, 2013 00:00

In a statement to the BSE, the company attributes the failure to publish financial results for the year ended February 28, 2013 within the time prescribed by the listing requirements to several factors.The company therefore asked the BSE and JSE to 'temporarily suspend, with immediate effect, the trading in Blue Securities' until a further announcement is made.Trading on the company's shares has also been suspended on the JSE, where Blue has a primary listing.

Last month, Blue advised shareholders that it anticipated that earnings per share and headline earnings per share would be at least 20 percent lower that the comparative period.It is in relation to this trading update that the company now says it won't be in a position to publish its consolidated results in time. In a statement, Blue says the decision was reached while taking into consideration that a debt restructuring agreement terminates in January 2014 and the financial implications of this need to be considered in the February 2013 results.Another factor that contributed to the delay in publishing the results is Blue's continuing recapitalisation negotiations with its majority shareholder, Mayibuye Group.

'The recapitalisation negotiations remain key in achieving the group's objective of securing a stronger balance sheet in order to raise future funding, considering the importance of this to the sustainability of the group. These negotiations have yet to be finalised,' said the company. Another deliberation was that while the outcome of a forensic audit commissioned by the company's board in 2010 is nearing conclusion, the board then requested a new investigation, which is still ongoing. 'The board wishes to gain further certainty of the impact, in any of these investigations on the February 2013 financial results,' Blue said.

A massive restructuring exercise in 2010 turned fortunes around at Blue, with the financial services company recording improved results in 2011 from the doldrums that resulted in the near-collapse of the micro-lending firm.Blue experienced losses when it failed to provide finance for customers at its newly acquired 90 branches in South Africa. The group failed to raise funds through borrowings, especially in 2008, owing to the global financial recession. Blue, which listed on the Botswana Stock Exchange in 2008, operates in 12 African countries.