The Cygma Group has embarked on a massive restructuring of its shareholding in subsidiary company, De Novo Media. After the acquisition of a 25% share in the business, including the sheqafrica.com publication in May 2016, the Group has decided to sell off its shares in De Novo Media. This comes after the lower than expected performance of sheqafrica.com as an income generating entity.
During May 2016, the Group purchased a stake in De Novo, in order to acquire the sheqafrica.com online magazine. A further investment in De Novo was made by Cygma SHEQ, who also secured a 25% share in sheqafrica.com. In December 2016, Group MD, Rudy D Maritz announced its withdrawal as shareholder and instructed De Novo to sell off its 25% share.
De Novo is currently offering investors a business opportunity linked share in the company at R14 500 per opportunity to raise the capital for the buy-back, which will then include an Advertising Agency with income potential. The information about the business opportunity has been released on the sheqafrica.com website. A total of 25 opportunities have been released, representing a majority stake in De Novo Media.
Four other companies owned by the Cygma Group, Agrisheq, Citiliving, Citilimits and SafetyInspector Mobile Audits, are also under restructuring due to poor financial performance. “These entities demanded more resources than expected.” said Maritz, adding that the current competition is too fierce.
Agrisheq has been taken over by Cygma SHEQ, while the Citi Property portals, have been shut down. Maritz said the economy of South Africa does not produce enough high-end entrepreneurs to warrant the upkeep and maintenance of property portals.
With the restructuring, two new business units are being opened in 2017, with Cygma SCM, a training & development business and Cygma Fire Engineering, both operating as franchised networks, being launched within the next month or two.
Further restructuring includes the diversification of the Cygma SHEQ operation into four new subsidiary business entities. Cygma SHEQ is also investigating its African expansion for 2017.
The Group plans to change over to a public company by the end of 2017 and have already set up its operations to include MENA and EU operators as partners.
According to the latest developments, the major reason for the restructuring is strategic rather than financial in nature and the Group is sorting out its skills set to match the operational requirements of each division. The service offering was to fragmented to allow for proper control. With the new vision, each business entity will be grouped by its core offering, rather than the discipline it serves. In the SHEQ division alone training and auditing was split across all the businesses. With the new model all training related services will resort under Skills Conversion Management and auditing will resort under the Auditing & Certification branch of Cygma SHEQ.
The demand for high end entrepreneurs to enter the consulting sector has been expanded through this model, allowing for a wider range of professionals to join the Group.
De Novo Media will in future operate as an independent entity and will no longer be part of the Group, once the buy-back has been finalised.