Stellenbosch - The PSG Group has moved to start complying with the financial services charter through a partnership with a new black empowerment company, Arch Equity.
Arch Equity will acquire in cash 10 million shares, or 3.7 percent, of the PSG Group.
Desmond Lockey, who resigns from parliament's back benches later this year and who recently became the controlling shareholder of the PSG life assurer Channel Life, is the controlling shareholder of Arch Equity and will serve as its chief executive.
PSG Group's share price rose 5c to R3.95 yesterday.
Lockey's investment interests, including Channel Life, will be consolidated in Arch Equity. A number of the black consortium members will serve on the Arch Equity board, including the chairman. Lockey was also appointed to the PSG Group board.
The issue of 10 million shares, using treasury stock, at R3.555 a share, represented the first step to enable Arch Equity to hold at least 10 percent of PSG Group's issued share capital.
PSG Group said Arch Equity had enough capital to fund the issue for cash and it was the empowerment company's aim to raise further capital in time by way of a private placement.
Lockey said the establishment of Arch Equity was in line with the financial sector charter and would ensure a significant black empowerment influence on the PSG Group. Arch Equity was a fully fledged investment company and would focus on empowerment transactions.
Jannie Mouton, the chairman of PSG Group, said the company had searched hard for the right person to launch the group's black economic empowerment initiatives with.
PSG Capital and the Mouton family had committed themselves to the provision of capital to Arch Equity and would have a significant minority interest in Arch Equity. Mouton will also serve on Arch Equity's board.