Johannesburg - Brimstone Investment Corporation, the Cape Town-based empowerment company, has netted R460 million from the sale of a portion of the empowerment stake in Johannesburg and London listed insurer Old Mutual to Citigroup, the company announced in a statement on Wednesday.
The empowerment deal, concluded in 2005, reaches its 10-year end of financing period on the 1st of May this year.
The company said it has sold, through its UK Special Purpose Vehicle, 11.4 million shares for GBP2,27, or R40.30 per share to yield a total consideration of GBP26 million, or R460 million. The transaction was concluded at an exchange rate of R17,75 to the pound.
The bulk of the proceeds, about GBP21 million or R385 million, will be used to settle the outstanding subscription price on the Old Mutual shares while Brimstone will retain about GBP4,1 million or R73 million. Brimstone will also receive the 2014 final dividend of R1.11 per share.
The company said the net asset value of the shares subject to the sale was R 395 million, while profit attributable to the shares was R 51 million and the sale required no shareholder approval.
Brimstone is one of the most successful empowerment groups with investment in financial services, manufacturing and fast-moving consumer goods.
ANA