Empowerment: Brimstone reaps Nedbank fruits

Brimstone’s black economic empowerment deal with Nedbank has matured, the black-owned investment group said yesterday. In 2005, the group led a broad-based consortium in acquiring a shareholding in Nedbank of 0.61 percent at a market value of R198 million. At the end of 2014, the pre-tax value of the investment amounted to R576m or 7 percent of Brimstone’s intrinsic gross asset value. At the time the transaction was entered into, Nedbank traded at R74.75. On December 31, the bank’s stock closed at R249. On top of this, Brimstone earned significant fees from Nedbank over the ten-year investment period. The combination of share price growth, performance fees and dividends earned over the period resulted in the investment delivering a 76 percent internal rate of return since inception. Chief executive Mustaq Brey said: “Brimstone’s philosophy is premised on being profitable, empowering and having a positive social impact. Using these three criteria in assessing the Nedbank deal, we can comfortably say that we have achieved in all three areas.” – Nompumelelo Magwaza