Workers clean windows outside the Cape Town headquarters of Anglo-South African financial services company Old Mutual.
Cape Town - Financial services group Old Mutual said on Thursday that it might draw on its £586 million (R9.88 billion) cash reserve as it continues to strike deals to break up its business in a move that would see an initial public offering of the demerged businesses being on the cards next year.

The company was updating the markets ahead of its annual general meeting held yesterday in the UK. Bruce Hemphill, the chief executive of Old Mutual, said the managed separation process was going according to plan.

“We are very pleased with the progress we have made since announcing managed separation. We have said we would create four independent businesses, and with the recently announced transactions in respect of OM Asset Management, that business is now independent. We are aiming to complete the two listings that will materially deliver the managed separation at the earliest opportunity in 2018 after our full year results,” Hemphill said.

The group announced in March last year that it would be separating its businesses to cut down on international operational costs and to be able to better take advantage of and enhance its smaller operations.

The move will see the company to spin its Wealth and Emerging Markets units into individual listed companies, the latter of which will also take a strategic minority stake in its Nedbank operation in South Africa.

Read also: Old Mutual sells out of India

The company said upon the conclusion of the separation process that there would be a new South African holding company, to be named Old Mutual Limited, which will initially consist of Old Mutual Emerging Markets (Omem), the group’s Nedbank shareholding and Old Mutual plc. The other would consist principally of Old Mutual Wealth, with the possibility of a small initial offering.

“To that end, we intend to pursue one or more transactions which will ultimately deliver two separate entities - listed on both the London and Johannesburg stock exchanges - into the hands of Old Mutual plc’s then shareholders,” the company said. The company last month said it had appointed Vodacm’s non-executive charperson, Peter Moyo, as Omem’s chief executive, while former South Africa’s finance minster serves as it chairperson.

The group has taken significant steps towards completing the separation process since its last update in early March.