Wrap Text
Brimstone’s Nedbank deal matures
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa
(Registration number 1995/010442/06)
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
("Brimstone" or “the Company”)
PRESS RELEASE
BRIMSTONE’S NEDBANK DEAL MATURES
Brimstone today announced that its BEE deal with Nedbank Group Limited (“Nedbank”)
has matured.
In 2005 Brimstone led a broad-based consortium in acquiring a shareholding in Nedbank
(“the transaction”). Brimstone’s share of the transaction was an effective 0,61% of
Nedbank at a market value of R198 million at the time. The transaction was widely
welcomed as a landmark BEE deal in that, for the first time, part of a BEE deal’s
financial success would be linked directly to performance arrangements with specific
measurable deliverables expected of the BEE partners.
Brimstone CEO, Mustaq Brey commented:
"Brimstone’s philosophy is premised on being profitable, empowering, and
having a positive social impact. Using these three criteria alone in assessing
the Nedbank deal, we can comfortably say that we have achieved in all three
areas. The experience with Nedbank has been very positive. Partnering with
excellent management; and working with the many great people in Nedbank
has been rewarding for Brimstone and its consortium partner Mtha-we-
Mpumelelo.”
Profitable deal
Brimstone takes a long-term view on, and has a partnership approach to its
investments. At the time the transaction was entered into, Nedbank traded at R74.75
and at 31 December 2014 (Brimstone’s latest reporting date) Nedbank closed at R249.
In addition, Brimstone earned significant fees from Nedbank over the period as reward
for out-performance in terms of the annually negotiated and monitored performance
1 of 3
contract. The combination of share price growth, performance fees and dividends
earned over the period resulted in the investment in Nedbank delivering an exceptional
76% IRR since inception. At 31 December 2014, the pre-tax value of the investment in
Nedbank amounted to R576 million or 7% of Brimstone’s intrinsic gross asset value.
Empowering relationship with a positive social impact
Brimstone executives played an active strategic role in various transformation initiatives
within Nedbank over the last 10 years, including participation in staff development and
mentoring. Aside from the mutually beneficial commercial (deal generation) element of
the relationship between Brimstone and Nedbank and its different business units over
the period, Brimstone and Nedbank have formed an enduring partnership in some of
their corporate social investment initiatives. These include projects in the areas of
education, poverty alleviation (feeding schemes), shelter and housing (including the
winter warmth campaign and different housing initiatives) through mutual support of
the work of the Brimstone Foundation and Nedbank Foundation.
Brimstone currently has in excess of 3 million beneficiaries. Its shareholder base
includes 26 NGO’s spread across South Africa whose beneficiaries include the most
vulnerable and marginalised members of society. Brimstone Executive Chairman, Fred
Robertson says:
“This year Brimstone celebrates its 20 year anniversary. Brimstone has
established a track record of creating value for all its stakeholders. It has
paid 13 annual cash dividends to its shareholders to date and when these
dividends are paid they have a direct benefit to our many broad-based NGO
shareholders. Investments like Nedbank make it possible for us to continue
to deliver on our mandate, and enable us to have a real impact on society at
large.”
2 of 3
Mr Robertson adds that the maturity of this deal does not imply an end to Brimstone’s
relationship with Nedbank. “Whilst the end of this transaction has been reached,
Brimstone and Nedbank have already initiated discussions aimed at
furthering the relationship between us.”
In this regard, in separate announcements this week Brimstone and Nedbank said that
they had agreed to jointly make a financial contribution and commit resources to the
development of entrepreneurs and job creation in rural and urban areas, in partnership
with Old Mutual plc (“Old Mutual”), Nedbank’s parent company. “The endowment of
R100 million created by Brimstone, Nedbank and Old Mutual will advance
transformation, entrepreneurship and job and wealth creation in rural and
urban areas.” says Mr Robertson.
Asked for comment, Nedbank’s CEO Mike Brown said ”Our partnership with
Brimstone has worked because we were jointly committed to building a
commercially sound structure which added economic and transformational
value to our respective businesses. Brimstone has been alongside us on our
growth path for the past decade, generating successful funding and other
deals for Nedbank, ranging from individuals to multi-billion Rand projects.”
“The relationship between Brimstone and Nedbank has been mutually
beneficial at many levels. There are many other areas where we can and will
continue to co-operate and work with Nedbank. The exact detail of these will
be finalised soon,” concluded Mustaq Brey.
25 February 2015
Sponsor
Nedbank Capital
3 of 3
Date: 25/02/2015 08:57:00 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.
Sharenet Sites 
