Independent Media’s future uncertain as Sekunjalo pulls funding plug

Sekunjalo says its future decisions will focus on commercial sustainability rather than job preservation and support for media freedom. Picture: iStock After pouring what it says is more than R5.2 billion into Independent Media and related media businesses over the past decade, Sekunjalo Group has pulled the funding plug, throwing the future of the newspaper company into doubt. Also in doubt are titles such as the Cape Times, The Star and The Mercury.

Sekunjalo says Independent Media’s licence to use these mastheads expires at the end of July. Sekunjalo Group CEO Lucien Jacobs said it was too early to comment on the future direction of the loss-making Independent Media beyond July, although discussions are taking place with key shareholders to find sustainable solutions. These include the Public Investment Corporation (PIC), the Southern African Clothing and Textile Workers’ Union (Sactwu) and Interacom.

The media company has been informed that it can no longer rely on financial support from Sekunjalo. “As a result, the company’s ability to continue operating as a viable business is now uncertain,” said Jacobs. Independent Media was acquired from Dublin-based Independent News & Media in 2013 in a transaction valued at R2.1 billion.

[paywall]

Sekunjalo’s statement says R1.2 billion was invested by the Sekunjalo consortium and R880 million was provided by the PIC. The Mpati Commission of Inquiry, set up in 2018 to investigate allegations of impropriety and poor governance at the PIC, put the state-owned asset manager’s exposure to the transaction at up to R1.44 billion through a 25% equity investment and two loans. The PIC received back R325.75 million after the transaction was restructured.

Sekunjalo says it subsequently invested another R1.8 billion directly into Independent Media, while R2.2 billion went into other media and technology businesses within the group. In a statement issued this week, Jacobs said the executive team had concluded that continued funding of a loss-making Independent Media was no longer commercially sustainable. All future investment and product decisions relating to the group’s media assets will be guided by commercial sustainability, he added.

[/paywall]