To view the PDF file, sign up for a MySharenet subscription.

AFRICAN RAINBOW CAPITAL INVESTMENTS LIMITED - Proposed acquisition of 25% shareholding in Sanlams third-party asset management business

Release Date: 20/08/2020 07:15
Code(s): AIL     PDF:  
Wrap Text
Proposed acquisition of 25% shareholding in Sanlam’s third-party asset management business

African Rainbow Capital Investments Limited
(Incorporated in the Republic of Mauritius)
(Registration number C148430)
JSE share code: AIL
ISIN: MU0553S00000
("ARC Investments" or "the Company")

PROPOSED ACQUISITION OF 25% SHAREHOLDING IN SANLAM’S THIRD-PARTY ASSET MANAGEMENT
BUSINESS

ARC Investments wishes to draw shareholders’ attention to the announcement released by Sanlam
Limited ("Sanlam") on the Stock Exchange News Service ("SENS") today, regarding Sanlam’s intention
to reorganise its third-party asset management business in order to enhance the competitiveness and
empowerment credentials of the business.

Sanlam intends to establish a leading South African black-owned asset management company through
the sale of 25% of its South African third party asset management business, other than the investment
management business conducted by Sanlam Private Wealth Proprietary Limited and the Sanlam
Specialised Finance division to its B-BBEE partner, Ubuntu-Botho Investments Proprietary Limited
("UBI" or "UBI Group") (the "Transaction"). The Transaction will support Sanlam’s growth and enhance
its position in this important market, whilst also building on the Sanlam philosophy of mutually
beneficial partnerships in pursuit of shareholder value creation.

The Transaction will entail:
   (i)     the creation of a new investment holding company ("NewCo"), in which Sanlam will initially
           hold 100%. NewCo will hold 100% of the interest in Sanlam Investment Holdings Proprietary
           Limited ("SIH") which will, in turn, hold the Sanlam Investment Group’s interests in third
           party asset management businesses in South Africa, other than the investment management
           business conducted by Sanlam Private Wealth Proprietary Limited and the Sanlam
           Specialised Finance division; and

   (ii)    African Rainbow Capital Financial Services Holdings Proprietary Limited ("ARC FS")
           purchasing shares in NewCo which will give it an effective economic interest of 25% in SIH
           (the "ARC Transaction") for a cash consideration calculated with reference to a base value
           of R 787.5 million, adjusted for the period between 30 April 2020 and the ARC Transaction
           effective date with a factor equal to the funding rate of the preference share facility made
           available by Sanlam to UBI which was approved by Sanlam Shareholders in December 2018
           ("UBI Facility") . The ARC Transaction will be funded from ARC FS’ existing cash resources
           and the UBI Facility.

ARC FS, which is 50.1% owned by African Rainbow Capital Proprietary Limited ("ARC") and 49.9% owned
by the ARC Fund, is the entity which holds all the financial services investments in the UBI Group, other
than the investment in Sanlam which is held directly by UBI. ARC is a wholly owned subsidiary of UBI.

Full details of the Transaction are contained in Sanlam’s SENS announcement.

Disclaimer
The Company will report in detail after the finalisation of the financial results for the full-year ended
30 June 2020. This is expected to be released on or about 15 September 2020.


Ebène, Mauritius (with simultaneous circulation in Johannesburg)
20 August 2020

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 20-08-2020 07:15:00
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.

Share This Story