Will Barclays kill off Pinotage?

The Financial Times reports that Barclays, the UK bank, is to sell its African investments. The ax is expected to fall on Tuesday. The FT reports ” Africa is one of Barclays’ few genuine growth areas, but […] it is becoming a costly distraction as the South African rand devalues and the country’s economy slows down. The bank also sees extra risks of corruption and misconduct in Africa. ‘Barclays does not own all of the equity, but it owns 100 per cent of the risk if something goes wrong'”

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If Barclays sells ABSA, who will pick up the annual R1 million plus sponsorship of the Pinotage Association? Barclays owns 62.3% of ABSA and the FT notes “the stake is worth R78bn (£3.5bn) at current market prices. Investment bankers say there are no obvious strategic buyers for the African business. The value of the stake has fallen in recent months, making the option of steadily selling the stake to institutional investors less attractive.”

Pinotage has yet to break out of the SA laager with the only recent noteworthy achievement one UK luvvie hailing the Kanonkop Black Label Pinotage top of his annual review of SA wine. But then WOSA paid for his trip to SA (he insists he paid for his wife) and the owner of Kanonkop was chairman of WOSA at the time. Which raised a few eyebrows, to say the least and is symptomatic of the kind of “misconduct” that is chasing Barclays away from the continent.

Potential SA investors with £3.5bn in their pockets like Christo Wiese, Johann Rupert, Jannie Mouton, Markus Jooste and GT Ferreira already have substantial exposure to SA wine or have been burnt before trying to buy KWV, which would make a Pinotage sponsorship less than attractive. Still the ego of an SA billionaire should never be underestimated, something the Pinotage Association will be fervently hoping for at their next braai.