Old Mutual consulted top institutions during review
Cape Town - Financial services company Old Mutual has been in regular contact with the National Treasury, the South African Reserve Bank (SARB) and the Financial Services Board (FSB) over the course of its strategic review, according to a joint statement issued by the three institutions.
On Friday, Old Mutual announced that it intends to implement a managed split into four separate businesses, including a standalone Old Mutual Emerging Markets (OMEM) and Nedbank.
“As part of this managed separation, Old Mutual has stated its intention, in time, to reduce its shareholding in Nedbank to an appropriate strategic minority position,” said the joint statement.
“The exact mechanism to achieve any reduction in Old Mutual’s shareholding in Nedbank has yet to be finally determined, but Old Mutual has communicated that it currently envisages reducing its shareholding in Nedbank primarily by way of a distribution of Nedbank shares to the shareholders of Old Mutual in an orderly manner and at an appropriate time.”
SARB, the FSB and the Treasury were in contact with Old Mutual over the course of the strategic review, according to the trio’s statement.
“The consultation and dialogue has been constructive, and there is a commitment by the boards of directors and management teams of Old Mutual, Nedbank and OMEM to execute the managed separation in a way that safeguards the stability and integrity of both the South African businesses and the South African financial services sector more broadly.
“OMEM and Nedbank are each significant businesses in their own right with strong balance sheets. The enhanced ability of these businesses to access their natural shareholder base is welcomed; as is the increased alignment of the key governance structures and lead supervision with the location of the respective businesses. This will have positive benefits for the South African economy and capital markets.”
The managed separation process will involve ongoing regulatory engagement. The FSB and the Reserve Bank will work with Old Mutual and Nedbank to ensure that any potential execution risks are mitigated, according to the statement.IOL