Festive cheer for headhunters

Last week was a good one for headhunters. The apparently unexpected resignations of Telkom’s Tsholofelo Molefe and Truworths’s David Pfaff means there are two juicy fee-generating appointments to be made rather urgently.

And then there was the presumably not-unexpected departure of Comair CEO Wrenelle Stander. The headhunters won’t get a look-in there, as the new controlling shareholders have already named Stander’s replacement.

Glenn Orsmond, who was previously and rather confusingly, joint CEO with Stander until he accepted a retrenchment package early this year, is back at the helm of this troubled airline.

Comair stopped flights in March and was put into business rescue in May; that process has not yet been completed although the airline resumed flights last week.

It turns out that Orsmond, and five of his Comair colleagues, moved quite rapidly to hook up with the consortium that engaged with the business rescue practitioners.

That consortium has emerged with a 99% stake in Comair.

Stander, who’s not letting on to any behind-the-scenes Shakespearean drama, seems quite phlegmatic about it all and says it’s reasonable that the new shareholders would want to appoint their own team. One thing’s for sure, that new team will want to hold on to the streamlined cost base that Comair lost control of during the 18 months or so leading up to the business rescue process.

Truworths

Things aren’t quite as clear-cut over at Truworths, which early last week announced the resignation of Pfaff, who is not only the group’s chief financial officer but also its chief operating officer. Pfaff joined Truworths in 2013, which makes him a relative newcomer; certainly in the context of Michael Mark’s 30-year tenure as CEO.

Pfaff’s unexpected departure was accompanied by that traditionally terse explanation that he resigned “in order to pursue other career opportunities”. The Sens announcement said the 55-year old had been active in the development and execution of Truworths’s strategy, including the challenges dealing with the Covid-19 pandemic.

Pfaff’s departure will have been particularly surprising to anyone who attended the group’s recent AGM. His re-election to the board secured more support than any other director.

With backing from 98.6% of shareholders as recently as early November, it’s pretty clear this was not a move initiated by the owners of the company.

Pfaff’s support was even more impressive in the context of the 32.18% vote against chair Hilton Saven’s re-election to the board; or the 41% who voted against Mike Thompson’s reappointment to the audit committee and the 42% who voted against Rob Dow’s reappointment to the same committee.

So Truworths’s shareholders are obviously a discerning bunch and while board changes were expected, Pfaff’s departure certainly wasn’t.

Telkom

Molefe’s decision to quit Telkom in favour of MTN looks more straightforward, although it is a bit troubling that her resignation was effective immediately. Mind you, given the market overlap between the two groups perhaps that was appropriate.

Discovery

It’s that time of year again. Even a pandemic can’t quite kill off the holiday spirit or, it seems, eradicate Discovery CEO Adrian Gore’s need to tinker with his massively valuable hedging transaction. Indeed, the pandemic has probably heightened the need for both.

It was just over a year ago that Gore convened a teleconference to explain to investors why he had put in place a new collar to replace a five-year old contract that had expired. “I wanted to create a new collar that would run for another three to five years, but during the discussion process the market conditions worsened quite considerably,” said Gore, adding that the floor price (of the contract) was acceptable but the upside was too limited.

At the time the share price was trading at around R112.

After plummeting to a nerve-wracking R54.50 in March this year, the Discovery share price recovered well and is now trading at around R125.

Last week the group announced that Gore had further amended his hedging transactions “in order to regain previously uncapped upside”.

A few notable purchases by institutional fund managers last week included Coronation emerging with a 10% stake in HCI, and Allan Gray with 30% of Kap Industrial.

Remgro

And then there was Remgro’s AGM. What an unmitigated disaster that was, with nobody in attendance able to hear what was going on. Without doubt it emerges as the most technically-inept performance of the 2020 AGM calendar. What a shame; it’s usually quite entertaining and informative.