There may be some light at the end of the tunnel for the Pembury Lifestyle Group (PLG).
On Thursday the private schools group, whose shares have been suspended on the JSE for almost a month, announced that its CEO Andrew Robert McLachlan has agreed to step down with effect from August 15.
Jason McLachlan, an extended family member of the CEO and an executive director of the company, will also be leaving.
The CEO was suspended by the PLG board in January, who said at the time he was being is investigated for allegedly flouting corporate governance guidelines. But after he and other family members, including Jason, threatened to have the board reconstituted, he successfully fought his suspension, and returned to lead the company again in March.
PLG gets a funder
In addition to the two resignations, PLG announced on Thursday that one of its shareholders, Verityhurst Pty (Ltd), has thrown it a lifeline by buying 180 million of the company’s shares for R18.9 million. Since the JSE has suspended the trading of PLG shares, the money will be treated as a loan for now, until the company is allowed to issue and trade new shares.
The money will go a long way in solving some of PLG’s woes as the company is currently fighting off a liquidation application brought by its former auditors. Another supplier previously filed a separate liquidation application against the group for allegedly not paying for work done at two of PLG’s schools.
“The Initial Loan will be directed, inter alia, to ensure that the audit for the year ended 31 December 2019 is finalised, which would include the acquisition of the claims from the former auditors, payment to the current auditors and IFRS advisor and to ensure that the PLG Schools operations are properly funded,” said PLG in the statement.
It appears that Verityhurst is the one that convinced the McLachlans to step down. According to the statement, Verityhurst will nominate new directors to the PLG Board, including a new CEO.
Verityhurst is the same company that recently subscribed for R20 million worth of shares in Labat Africa, the company headed by former rugby boss Brian van Rooyen, that has been buying cannabis businesses.
According to its website, the 13-year old company was already a shareholder at PLG. It also owns stakes in DRDGOLD Limited, Steinhoff International and MTN, to name a few. As for its interest at PLG, the new shares will give a 30.2% stake in the company.
In another twist, while the CEO who also happens to be the founder of PLG is out, the company announced that Jaco Labuschagne who resigned as the company’s financial director and was due to leave on 31 July 2020, has withdrawn his resignation.
The company also said that Verityhurst’s offer comes with the condition that it immediately dispose of the PLG Retirement Villages subsidiary to the founder, McLachlan.
PLG previously indicated that its retirement villages segment no longer fits in with its long-term strategy. On Thursday, the group said the retirement villages business has been incurring monthly losses and has liabilities of more than R20 million.