Virgin Active's owner and Christo Wiese in talks about new plan

The plan seeks to materially cut Brait's debt through raising equity and recapitalisation. 

South Africa-based investment holding company Brait said on Monday that it is in talks with its major shareholder, Titan, as it plans to materially cut its debt, through raising equity and recapitalisation, among other ways.

“Careful consideration has been given to the cost structure of Brait and in consultation with Brait’s Corporate Advisors, initiatives are at an advanced stage to significantly reduce the net operating costs of Brait,” it said.

Billionaire Christo Wiese’s (pictured) firm, Titan — which controls 46 percent of the company — considers Brait a strategic long-term investment and intends to remain a significant shareholder, Brait said.

Brait has struggled with the challenge of owning embattled UK clothes retailer New Look, which it bought for £780 million and now values at zero. The group's other assets include British grocer Iceland and South Africa’s Premier Foods, which makes Blue Ribbon bread and Snowflake flour.

Business Day reported last week that Wiese has teamed up with Mergence Investment Managers and veteran activist investor Brian Myerson to propose an overhaul of the company.

As part of the proposal, Brait would take on a R3 billion rights offer, put in place new management and launch the sale or spin-off of the company’s investments apart from its 72 percent stake in Virgin Active.

Brait said it has engaged with Titan and the latter has been approached by third-party investors “with a view to support Brait’s efforts” to reduce its debt.

“Titan is fully aligned with the board of Brait and supports working with Brait’s Corporate Advisors to implement the strategic initiatives ... and to drive the performance of the portfolio companies with the support of the investee company management teams,” the company said.