WeBuyCars to list separately in April
Transaction Capital said late on Tuesday that it would list subsidiary WeBuyCars separately on the JSE on April 11.
The prelisting circular said it expected to raise R750m with a book build beginning on March 18. The company said it expected its value on the stock market, or market capitalisation, to be R8.7bn-R10bn with an estimated 413.7-million shares in issue.
Other estimates had put its market capitalisation at R6bnR7.5bn.
The value in the prelisting statement puts the starting share price at R21.03-R24.17.
This is significantly higher than the R10 share price of Transaction Capital, with the company holding a 74.9% stake in the used-car dealer.
Because the used-car group is unbundling from Transaction Capital, which owns the highly indebted SA Taxi, shareholders will be able to invest directly in WeBuyCars without exposure to the troubled taxi financier.
Transaction Capital would hold a general meeting of shareholders to approve the unbundling on April 15, it said.
Much of the information released in the prelisting statement is already in the public domain.
WeBuyCars sold a record 14,000 used cars in January, up from 12,000-13,000 monthly. It plans to sell as many as 23,000 a month in a few years as it increases its footprint and hopes to see more second-hand cars being financed.
In a book build to raise capital, it will issue shares to raise R750m to certain investors beforehand at an estimated R20.55 a share starting on Monday.
It is also placing R500m worth of private shares with Stockdale Street, the investment vehicle for SA’s Oppenheimer family and Ellvest, which linked to the Ellerine family.
Coronation Fund Managers is buying R760m in shares.
Money raised by Transaction Capital will be used to remove the cross-default clause between SA Taxi, which is likely to default on debt, and the holding company, ensuring the holding company is not liable for the debt.
In the statement it explained how the business founded by brothers Faan and Dirk van der Walt took over the market in which consumers sold secondhand cars directly to each other.
“Historically, sellers of older vehicles often experienced lengthy waiting periods for potential buyers to respond to their advertisements for vehicles for sale. [The] Van der Walts had well-placed advertisements on billboards and newspapers, offering their vehicle buying services.”
Customers preferred selling their vehicles to the Van der Walt brothers as they personally evaluated vehicles at the sellers’ workplace or home and made immediate payment to customers, a system still used.
The group has 74 pods across supermarkets for people to have cars valued and inspected if they do not wish to have a buyer come to their home or workplace, and wants to expand these countrywide.
“What started as a modest venture soon became a household name among South Africans,” WeBuyCars said.