Downsound Records owner acquires 14% of KLE
Tameka Gordon, Gleaner Writer
The KLE Group announced the sale of just about 14 million shares to Joseph Bogdanovich, owner and operator of Downsound Records, after prodding some of its directors to sell some of their holdings.
It gives Bogdanovich around 14 per cent ownership of the company.
"It took some doing, but we were able to make arrangements for some of the directors to make way for him to come in," Gary Matalon, CEO of the KLE Group told Wednesday Business.
"We are happy that we have finally found a way to get him in. He had been trying to buy shares for some time now, but it was difficult because the shares were not trading on the open market. People just were not prepared to sell," Matalon said.
The company separately advised the JSE that a director sold 8.1 million shares, while another sold just under 5.9 million, but did disclose the name of the sellers. Those transactions came two months after the sale of 7.18 million shares, also by a director.
At last disclosure, December 2013, there were five directors with shareholdings above six million shares: Gary Matalon, Kevin Bourke, Zuar Jarrett, Stephen Shirley and David Shirley.
Craig Powell would have been on the list, but he resigned as director on August 11, a month ahead of the last two transactions on September 9.
Matalon said the shares were sold to Bogdanovich for $1 each - the price at which the stock has traded since July. It prices the deal with Bogdanovich at $13.9 million and the company at $100 million.
Matalon said the addition of Bogdanovich as an investor in KLE will see the company "benefiting from his vast experience in the field of entertainment and his network of international contacts."
"I approached him months ago and basically had been talking with him on possibly collaborating on some of the things that we want to do for KLE," Matalon said.
"What I did was introduce him to everything that I was working on to see if there wasn't some way or the other that could help to improve and fast-track what we were doing," Matalon said.
Matalon's plans include franchising the Usain Bolt-branded Tracks & Records restaurants.
KLE has otherwise been reshaping its operations, including the sale of a minority stake in Fiction Lounge earlier this year.
The Group maintains 60 per cent ownership of Fiction having sold a 40 per cent stake to CEO of New York based, David Annakie's Linkup Media Group of Companies.
KLE operates the Fiction Lounge, Famous Nightclub, Usain Bolt's Tracks & Records, and Odyssey Gaming Lounge.
At half year ending June 2014, the company's revenues slipped from $147 million to $116 million, but its losses were cut from $35 million to $21 million due to a tight squeeze on operating expenses.