WeBuyCars set to list
JSE: ITS SHARE PRICE SURGE OVER 10% IN MORNING TRADE
As part of this and unbundling, Transaction Capital also owns SA Taxi and Nutun.
Transaction Capital is moving ahead with its planned unbundling and separate listing of its WeBuyCars (WBC) business on the main board of the JSE – a move that saw its share price surge over 10% in morning trade yesterday.
The group confirmed the decision after the market closed on Tuesday, in a Sens announcement issued at 5.30pm.
“Shareholders are hereby advised that the board has in principle resolved to pursue the unbundling… The construct of the unbundling is yet to be finalised. If approved by the board, the unbundling will be implemented, subject to the fulfilment [or where permissible, waiver] of the unbundling conditions which are standard for transactions of this nature,” it said.
“The unbundling would be implemented by way of a pro rata distribution in specie of the WBC shares held by Transaction Capital on the relevant distribution date… The WBC shares will be simultaneously listed on the Main Board of the JSE,” it added.
The group first touted the unbundling and separate listing of WeBuyCars, together with the subsidiary’s founders, in its 2023 results announcement in December last year.
“WeBuyCars is unlisted… It is intended that all of the WBC shares will be listed on the Main
Board of the JSE simultaneously with the unbundling. Accordingly, in terms of paragraph 5.85 of the JSE Listings Requirements the unbundling will not require the approval of shareholders,” Transaction Capital pointed out in its latest Sens.
“As the unbundling is deemed to be the disposal of the greater part of the assets or undertaking of Transaction Capital in terms of section 112 of the Companies Act, it will require the approval of shareholders by way of a special resolution, in compliance with the provisions of section 115(3)(a) of the Companies Act,” it added. SA Taxi impact
As part of its rationale behind the unbundling, Transaction Capital noted that it owns majority stakes in three underlying businesses – Mobalyz (SA Taxi and Gomo), WeBuyCars and Nutun.
“Given SA Taxi’s disappointing performance in 2023, and the negative impact this had on the broader Transaction Capital group, Transaction Capital has undertaken to focus on unlocking shareholder value from its existing portfolio of companies,” it said.
The group said it aims to achieve the following at holding company level:
Significantly reduce the level of debt;
Remove the cross-default triggers which are currently in place;
Eliminate the WeBuyCars put option liability; and
Settle the Santaco (South African National Taxi Council) equity cure of R285 million in the event that payment is called upon, which aligns with the objectives of the unbundling, if approved.
Transaction Capital highlighted that WeBuyCars is “uniquely positioned in South Africa’s large and extremely relevant second-hand vehicle market, giving it substantial growth potential”.
“In the 2023 financial year [FY2023], WeBuyCars delivered on key performance metrics, including increased volumes and growth in market share. Although earnings were down in the first half of FY2023, the business saw a strong recovery in the second half,” it noted.
“This positive momentum has continued into 2024, notwithstanding the adverse market conditions.”