Afristrat shares trade suspended on the JSE

Following the company's failure to timely file its annual financial statements.
The JSE has halted trading in the shares of Afristrat Investment Holdings Limited, a financially troubled listed financial services company.

Afristrat, formerly Ecsponent Limited, was suspended on Friday. It comes after the JSE informed shareholders last month that the firm had failed to file its annual reports for the fiscal year ending March 31, 2022, within the four-month period specified in the JSE's Listings Requirements.

The JSE had warned that Afristrat's listing could be suspended if it did not submit its yearly financial reports by July 31, 2022. In a Sens update on Friday, Afristrat stated that because its audited annual financial statements are only likely to be released on or before November 30, the JSE has decided to halt trading in all of the company's securities.

"The company expects that trading in its securities will restart once its annual financial statements, which form part of the annual report and include the notice of the annual general meeting, are published," it said.

Last month, Afristrat CEO George Manyere stated that the company would be unable to reach the JSE's deadline.

"We will surely publish, I believe, some time soon, but not before July 31," he stated.

MyBucks

Manyere explained that the delay is due to the company "working on a plan to salvage Afristrat's business because of the impact of the enormous losses we sustained with MyBucks." 

Frankfurt-listed MyBucks SA, a microlender in various southern African countries, has collapsed and is currently in liquidation, resulting in the loss of almost all of Afristrat's R1.5 billion investment in MyBucks SA.

After first giving start-up capital loans to MyBucks but being obliged to convert its loans into equity, Afristrat now controls 42.39 % of the company.

Manyere stated last month that an R800 million claim against MyBucks had been filed in Luxembourg with the receiver, who is in charge of MyBucks' bankruptcy and civil claims litigation processes in Botswana and South Africa. The latter, aiming at recovering R250 million from the company and/or MyBucks, has already started.

Manyere emphasized the importance of first cleaning up Afristrat's balance sheet, and that the business is evaluating all options to improve the company's liquidity.

"That is why we announced that they will contact our remaining creditors and lender with a proposal to convert their debt to stock," he explained.

Reaction of shareholders

In May 2020, preference shareholders in Ecsponent agreed to a group reorganization that resulted in R2.3 billion in preference shareholder debt being converted into equity in the firm.

Ecsponent investors responded angrily to a report regarding Afristrat, formerly Ecsponent, and its financial issues.

They all stated that Manyere's assertions were false and that Afristrat was running a scam.

They all claimed to have lost their investments in Ecsponent/Afristrat.

'Unprofitable investment'

Manyere stated last month, "As we have previously mentioned, the investments were lost due to an unsuccessful investment and an over-concentration of investment in MyBucks."

"Pretty much 90% of the R2 billion raised was invested in the MyBucks Group, mainly in Eswatini and South Africa," Manyere added.

"The largest investments were in South Africa, and a significant amount was lost there, as well as 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.”