Johannesburg - African Rainbow Capital, a South African financial-services firm started by Patrice Motsepe, the richest black South African, plans to raise more than 3 billion rand ($234 million) in an initial public offering of its investment-holding unit, according to people familiar with the matter.
ARC, as it’s known, will fold its non-financial services assets into the company and list the unit’s stock on the Johannesburg Stock Exchange, the people said, asking not to be named because the plans are private. The share sale, scheduled to take place by the end of September, may even raise as much as 5 billion rand, they said.
The JSE placement may be followed by a secondary listing on
A2X Markets, a new exchange part owned by ARC and due to start operating
later this year in
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Motsepe, 55, started ARC in April last year with access to as much as 17 billion rand in capital and a view to build interests spanning everything from life insurance and healthcare services and administration to money management and banking.
Motsepe, with a net worth of $1.8 billion according to the Bloomberg Billionaires Index, is pushing efforts to spread the country’s wealth more equally between the black majority and the white minority, who still own most of the economy 23 years after the end of apartheid.
The IPO comes as
Motsepe, a brother-in-law of Deputy President Cyril
Ramaphosa, earned his fortune by buying and improving output from marginal gold
mines operated by AngloGold Ashant. He expanded his company, African
Rainbow Minerals, into platinum, copper, coal and iron ore and started
Ubuntu-Botho Investments, ARC’s parent, in 2004. Ubuntu-Botho owns about
12 percent of Sanlam,
ARC aims to complete the IPO by the third quarter of this year and the investment-holding company will have an array of non-financial services businesses, such as its stake in EOH Holdings, which has interests in technology services, and Afrimat, a supplier of building materials, co-CEO Johan van der Merwe said in an interview with Johannesburg-based news service Moneyweb in March.
ARC will have a substantial stake in the investment-holding company and invest its own money into the unit, Van der Merwe told Moneyweb. It also plans to rise outside funds for ARC, he said.
Bidvest Group founder Brian Joffe raised 2 billion rand for the April listing of investment company Long4Life on the JSE, while EPE Capital Partners racked up a similar amount last year to help fund its private-equity arm.