New owners for Kolosus

Kolosus Holdings Ltd are poised to get their third new owner following an offer by Daun et Cie AG to buy a 90.76% share in the group. This would mean taking over the long-running battle between Kolosus and Seton USA. The court cases between the two go back to 1996 and Seton's claim against Kolosus now stands at R130 million ($16 million). Just days after the offer, in a related case, the High Court in Pretoria ordered Kolosus to pay R88.5 million ($11 million) to the liquidator of former subsidiary, Silveroak Industries Ltd - the same company at the centre of the dispute between Kolosus and Seton. As with the case against Seton, however, Kolosus will seek leave to appeal. Daun et Cie chairman Claas Daun sold his tanning interests to Kolosus ten years ago and subsequently became the major shareholder in Springbok Trading, the hide and skin trader (and, since last year, wet-blue producer). Kolosus are a vertical operation, including an abattoir, African Hide/Exoblue, Exotan, Kolosus Automotive Leathers, and Mossop-Western. In the six months to June 2002, Kolosus made a net profit of R3.1 million ($384,372) on sales of R567 million. The worst-performing division was the hide and skin trading, wet-blue and pickling operation, African Hide/Exoblue. Paul Schouten, corporate head of Daun et Cie's South African operations, said: 'The deal is subject to approval by the Competition Tribunal and until that approval is obtained we have no management control and we can't suggest or make any changes before the deal is approved. However, our feeling is that management is good and that the business can be made viable.' The only area of overlap between Kolosus and Springbok is in trading and semi-processing of hides and skins, both centred around Port Elizabeth, and Springbok managing director Paul Ward said if a trading company couldn't fill their wet-blue plant, 'it become a vicious cycle of higher unit costs.' A merger of Springbok and African Hide/Exoblue would give the combined company three wet-blue plants, in Port Elizabeth, Uitenhage and Butterworth. Despite buying and refurbishing their two plants last year, Springbok still use North West Tanning to contract wet-blue their surplus hides and now export 'almost no raw hides'. Kolosus group managing director Anton Bischof said Kolosus management was 'fully supportive' of the offer and he expected all divisions to continue improving.