It has to be an executive’s worst nightmare: that discussion between fellow executives before an investor call with analysts, talk that is clearly not meant for the ears of investors or shareholders, and it goes live on the internet.
Well that’s what happened to RMH’s investor call on Tuesday morning. A conversation between RMH chief financial officer Ellen Marais and CEO Brian Roberts, approximately ten minutes before the scheduled investor call, about a sensitive legal dispute that the investment holding company is involved in, was downloaded by them, probably accidentally, and subsequently, went viral on the internet.
Fortunately, in this case, the difference between what Roberts and Marais said was not materially different from what they said in the formal proceedings.
On Monday Atterbury Europe was meant to have repaid a R487 million loan to RMH, for a loan that RMB provided to Atterbury in July 2016, or, according to Atterbury, it had the option to convert the loan to equity.
The matter had also supposedly gone to arbitration on one term of the loan agreement, arbitration that centred on the exact interpretation of whether Atterbury did not believe it had sufficient cash to repay the full loan.
During the formal part of investor call, it emerged that Atterbury did indeed choose to convert the loan into equity, that RMH had notified Atterbury that it did not accept the loan to equity conversion, and the arbitration that was meant to have happened, did not because the parties never got around to agreeing on the terms of the arbitration.
During the “informal” part of the investor call, the discussion between Roberts and Marais, Roberts can be heard, and seen, stating that they were just at the start of a process to retrieve this loan, and that RMH were shareholders of Atterbury, and as such had a right “to know what they are doing.”
He is heard asking: “Why didn’t they cc us on the conversion notice?”
Roberts questioned further: “What is the status now? Do they owe us the money?... If not they are illiquid…in default with every single loan they have.”
Roberts said in the formal investor call proceedings, more diplomatically, that they would update the market in a few days on the process further regarding the loan, because RMH was of the belief that Atterbury needed to repay the loan “immediately.”
He said Atterbury had decided they did not need to repay the loan because the loan had been made to Atterbury Property Holdings in 2016, but since then, this company, through successive restructurings had become an investment shell with not operational assets, and thus did not have the cash to repay the loan in cash, and Atterbury believed, neither did its affiliates or subsidiaries, but instead opted to convert the loan into equity.
BUSINESS REPORT