JOHANNESBURG - African Rainbow Capital (ARC) Investments, the acquisition-hungry investment vehicle started by billionaire Patrice Motsepe, on Thursday listed on the main board of the local bourse, with the company raising R4.3 bn as it sets its sights on shaking up the financial services sector.
The JSE said the group became the twelfth company to list on the JSE this year and brought the total amount of capital raised on the local bourse to date just over R76bn.
The group listed on the Speciality Finance Sector and its shares opened trade at R8.68 a share, reflecting the group’s net asset value (NAV) of more than R8bn. Motsepe said the listing of ARC Investments was a major step towards building a world class broad-based black-controlled investment entity.
“For us, this is a fulfilment of a 17-year journey. I put aside R200 million some years ago as part of a strategy to diversify into the financial services sector. We want to compete not only with the best in the country but the best in the world. I believe we are going to do very well,” Motsepe said. On Monday, ARC said its initial public offering was oversubscribed, prompting it to offer an additional 35 million shares at R8.50. This meant the company’s gross proceeds from the offer increased by R300m more than it was initially anticipated.
The company is run by former Sanlam heavyweights Johan van Zyl and Johan van der Merwe. Van Zyl served as the insurer’s chief executive, while van der Merwe served as Sanlam Investments’s chief executive. They both serve as ARC Investments co-chief executives. Post this listing ARC will remain the majority shareholder of ARC Investments.
ARC Investments has already concluded 16 investments in the financial services sector and 17 non-financial services investments since it was launched under two years ago. Among the group’s investment in the financial services sector was a 10-percent stake in the African operations of Alexander Forbes it bought last year for R753m. The company also has interests in Santam and Senayo Securities in the sector. Van der Merwe on Thursday said the company had more acquisitions in the pipeline and would continue to invest in the financial services sector.
“This partnership between outside capital and black empowerment capital is a win-win situation for our company. This gives us the opportunity to raise more capital and increases the sizes of the deals we will look at. We will definitely pour more capital into the financial services sector,” Van der Merwe said. ARC Investments’ listing also attracted institutional shareholders such as the Public Investment Corporation, Sanlam Private Wealth and the Singapore sovereign wealth fund.
Donna Nemer, the director of capital markets at the JSE, said the listing would offer shareholders the opportunity to invest in a permanently broad-based black-controlled investment entity holding a diversified portfolio of investments. “The listing of ARC Investments represents important progress in the transformation of the financial services sector and the JSE is proud to be able to aid in its growth through providing the company with access to deep pools of capital by means of a credible, liquid and well-regulated platform,” Nemer said. Nemer added that the speciality finance sector had a total market capitalisation of R108.8bn and contributes 0.7 percent to the overall market capitalisation of the JSE.
- BUSINESS REPORT