Johannesburg - Shares in Safmarine and Rennies Holdings (Safren) tumbled for a second day yesterday on concerns that a planned sale of its shipping unit might have hit a snag.
Safren fell 30c to R3,90 yesterday, compounding Tuesday's 5 percent drop and a 24 percent decline since January 18 after the company did not meet a deadline, set that day, to announce a buyer by month-end.
Safren declined to comment yesterday on how the sale of the unit, Safmarine, was progressing. It said an announcement would be made "in due course".
"It looks like the offers Safren has been getting are a lot less than they expected," said one transport analyst, who declined to be identified.
"I get a feeling that Safren might now actually hold back the sale, given the shipping cycle, which is at its worst in 10 years."
The decision to sell Safmarine, a shipowner and operator formed in 1946, came after Safren's majority shareholder, Old Mutual, decided to list on the London and Johannesburg bourses by mid-1999.
Safmarine, which operates container shipping services between Europe and South Africa, is the only unit left of the Safren group after the sale of its hotel, airline, cargo forwarding and shipping agency businesses last year.
Other analysts said they were still confident Safmarine could be sold, most likely to a European-based shipper attracted by its strength in north-south shipping routes.
"Safmarine has got a modern fleet, excellent management, is profitable and ... I think they'll integrate well into certain companies like Maersk, which is very strong as a container company," an analyst said.
A confidentiality clause has been imposed on the bidding for Safmarine but shipping lines, including Denmark's Maersk, Anglo-Dutch group P&O Nedlloyd and Germany's Hamburg Sud, are believed to be strong contenders. - Reuters