EMPOWERMENT FINANCE. Remodelling required.

Byline: Rob Rose

EMPOWERMENT FINANCE Remodelling required The experiment of a JSE-listed empowerment financier has gone the way of tasteful townhouses in Fourways and cheap credit.

The announcement this week of the intention to wind down Makalani, which listed in April 2005 amid grand ambitions to change the face of empowerment financing, means it is back to the drawing board to design the right business model for empowerment finance.

The decision to call time on Makalani's JSE experiment was based partly on demands from angry shareholders, who had complained that the company had steadily retreated from its R100 listing price to a lacklustre R69.

Officially, the reason for shutting the fund and sluicing capital back to investors was because the listed structure is not optimal. It's hard to argue with that, considering that at R69, the stock is trading at a 35% discount to its true value of R107/share.

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