ARC to sell 47% stake to raise R4bn in IPO

ARC INVESTMENTS, a holding company co-founded by mining tycoon Patrice Motsepe, said yesterday it would sell shares worth R4 billion in an initial public offering. African Rainbow Capital Investments, or ARC, announced yesterday it would sell more than 471 million shares, or a stake of about 47 percent, at R8.50 each, with about 25 percent sold to three cornerstone investors, including Singapore’s sovereign wealth fund, GIC. ARC was formed about a year ago by Motsepe and two other veteran financial services executives, Johan van Zyl and Johan van der Merwe, to build a company controlled by black people and spanning everything from life insurance and healthcare to money management and banking. Other cornerstone investors are the Public Investment Corporation, Africa’s biggest pension fund, and Sanlam Private Wealth, the asset management arm of South Africa’s biggest insurer, Sanlam. ARC said shares worth another R1.9bn, or a 22.4-percent stake, would be offered to pre-selected institutional investors. The flotation, slated for September 7, comes when the JSE’s main indices have been trading at record highs, and it may encourage other private companies to capitalise on investor sentiment and brave the public markets. The FTSE/JSE All Share Index, the broadest measure of the South African stock market’s performance, has returned nearly 12 percent so far this year as investors piled into companies that have branched out of South Africa, where the economy sank into recession in the first quarter. – Reuters