Sharenet Sites 
Sharenet Sites
Acquisition of 49% of Trustco Finance Namibia
Finbond Group Limited
(Registration number: 2001/015761/06)
Share code: FGL ISIN: ZAE000138095
(“Finbond” or “the Company” or “the Group”)
ACQUISITION OF 49% OF TRUSTCO FINANCE NAMIBIA
1. Introduction
Finbond shareholders are advised that Finbond has entered into an agreement
with TBN Holdings Ltd to acquire 49% of Namibian company Trustco Finance (Pty)
Ltd (“Trustco Finance”).
Trustco Finance provides educational loans to students enrolled at the Institute
for Open Learning (“IOL”) — the largest private distance-learning tertiary
education institution in Namibia.
Trustco Finance is ultimately a 100% owned subsidiary of Trustco Group Holdings
Limited, a Namibian company listed on the Namibian, Johannesburg and OTCQX stock
exchanges.
2. Nature of Finbond Business and Rationale for the Transaction
Finbond is a leading South African and North American financial services
institution that specialises in the design and delivery of unique value and
solution-based credit products tailored to borrower requirements rather than
institutionalised policies and practices.
Finbond is a credit provider with both brick and mortar and online operations.
Finbond conducts its business through a total of 589 stores (397 in South
Africa, 192 in North America) with online offerings in both South Africa and 6
states in the US.
The rationale for the Transaction includes:
• Diversified earnings with significant growth opportunity;
• Expanding Finbond’s online offering to Namibia;
• Expanding Finbond’s operations to Namibia;
• Expanding Finbond’s diversification with the addition of student
lending; and
• Further diversification of country and political risk.
3. The Transaction
3.1. Nature of business of Trustco Finance
Trustco Finance provides both short-term student loans (1 to 5 months) and long-
term student loans (6 to 60 months).
Trustco Finance was acquired in 2005 with an initial loan portfolio of NAD 5
million and has grown from strength to strength during the past 18 years to
become the preferred student loan lender in Namibia. Currently, Trustco Finance
has a loan portfolio exceeding NAD 650 million and the loan book peaked at over
NAD 771 million at the start of 2017. Since 2005, Trustco Finance has disbursed
loans of approximately NAD 1.3 billion (loan amount) and collected more than
NAD 2.5 billion in instalments.
Trustco Finance’ key strengths inter alia include:
• Senior management with extensive experience in student loans;
• Dominant market position with various licenses;
• A proven and scalable online student loan offering;
• Focused cash generative student loan products; and
• Robust collection technologies and processes
Trustco Finance’s management has a long and successful track record within the
student lending sector in Namibia. This, combined with well-developed systems,
unique branded product offerings and a well-trained and motivated staff
complement, provide Trustco Finance with a competitive advantage for achieving
its objectives.
3.2. Salient terms
The salient terms of the Transaction are as follows:
• The purchase consideration payable by Finbond will be R60 million for
49% of the shares in Trustco Finance.
• 50% of the purchase consideration set out above will be payable in cash
on the signature of the definitive agreement on or before 31 July 2023.
• The remaining 50% of the purchase consideration will be payable when the
Balance Sheet of Trustco Finance as at 31 August 2023 has been
restructured to simplify the structure of Trustco Finance and to reflect
the intention of the parties and has been audited without any
qualification or modification.
• The anticipated effective date of the Transaction will be 1 August 2023.
3.3. Conditions precedent
The Transaction remains subject to the following conditions precedent, to be
fulfilled by no later than 31 July 2023:
• Finbond’s Board and Investment Committee Approval;
• Trustco Finance’s Board and Investment Committee approval;
• All regulatory approval as required; and
• Finalisation of a satisfactory due diligence investigation.
4. Financial Information
The net asset value and net loss before tax of Trustco Finance amounted to ZAR
34 million and ZAR 179 million respectively, based on audited results for the
year ended 31 August 2022. The audited results of Trustco Finance for the year
ended 31 August 2022 were prepared in accordance with IFRS.
The Trustco Finance portfolio company was accounted for at a fair value of ZAR
183 million in Trustco Group Holdings’ Annual Financial Statements as at 31
August 2022.
The net carrying amount of the student loan book of Trustco Finance as at 31
March 2023 per Trustco Finance’s management accounts (in terms of IFRS 9) is
ZAR 325 million. Finbond is satisfied with the quality of the management
accounts.
Prior to the effective date, the Balance Sheet of Trustco Finance will be
restructured to reflect the intention of the parties and Trustco Finance
warrants that the restructure will lead to a net asset value of Trustco Finance
at fair value of ZAR 226 million, based on Trustco Finance’s contractual
warranties. This net asset value has not been reviewed or reported on by the
Company’s auditors.
5. Funding of the acquisition
Finbond will fund the Transaction from surplus cash.
6. Categorisation of the Transaction
The Transaction is categorised as a Category 2 transaction in terms of the JSE
Limited Listings Requirements and is therefore not subject to Finbond
shareholder approval.
7. Withdrawal of Cautionary Announcement
Shareholders are referred to the cautionary announcements released on SENS on
4 April 2023, 6 April 2023 and 22 May 2023 and are advised that all the details
of the Transaction are published in this announcement. The cautionary is
withdrawn and shareholders are no longer required to exercise caution when
dealing in the Company’s securities.
* The NAD/ZAR exchange rate at close of business on 1 June 2023 equaled 1.00
Pretoria
2 June 2023
Sponsor and Corporate Adviser:
Grindrod Bank Limited
Date: 02-06-2023 03:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
