ARC aims to raise R4bn on JSE listing
Company to list as an investment entity
THE PATRICE Motsepe-controlled investment vehicle African Rainbow Capital (ARC) aims to raise close to R4 billion in a listing on the local bourse next month as the group takes aim at significant minority equity interests in established and start-up businesses.
The company will list as an investment entity in the “Financials – Speciality Finance” sector on the main board of the JSE.
As part of its offer and listing plans, ARC said yesterday that it would offer shares worth R1.9 billion to private investors, while it made available a R2.1bn stake to three pre-selected institutional investors that include: the Public Investment Corporation, Sanlam Private Wealth and GIC Private, a sovereign wealth fund established by the government of Singapore.
The company plans to use the net proceeds of the offer to fund the balance of the acquisition consideration for Rain and to fund other investment opportunities. It also bought a 20 percent stake in Rain, a fixed and mobile data network operator in July for an undisclosed amount and sees great potential in the company.
Johan van Zyl, the co-chief executive of ARC, said one of the aims of the group was to become a leading broad-based black-owned and black-controlled financial services group.
“ARC seeks to utilise its empowerment credentials, balance sheet strength, the business track record of its leadership team and its brand to invest in financial services distribution businesses.
“And to take strategic equity stakes in underlying financial services product providers and to acquire majority or significant minority empowerment stakes in non-financial services businesses,” Van Zyl said.
ARC is a subsidiary of Ubuntu-Botho Investments (UBL), a broad-based black economic empowerment group that came about in 2004 as Sanlam’s empowerment partner.
UBL’s 14.5 percent interest in the insurance giant is now valued at around R17bn, some of which was used to launch ARC last year.
The listing of ARC will mark a second holding company Motsepe takes to the markets since the 2002 listing of ARMGold, the predecessor African Rainbow Minerals (ARM).
ARC, which was established last year by Motsepe, who serves as the group’s chairperson, and Johan van der Merwe and Van Zyl, both former Sanlam executives, has already spent more than R5bn in acquiring equity interests in a diversified portfolio of listed and unlisted investments.
The group has so far shown a healthy appetite for assets in the financial services sector.
Last year, it splashed R753 million on acquiring a 10 percent stake in Alexander Forbes, while earlier this year it bought a 20 percent stake in South Africa’s new stock exchange A2X Markets for an undisclosed fee.
ARC also plans a secondary listing on A2X.
The group also holds a 29 percent interest in CMB International, the listed holding company of independent investment banking and advisory firm Bravura, among its other investments.
However, the company said post the listing, its most significant investment will be in the telecoms sector, through its 20 percent interest in Rain.
Van Zyl said Rain was intended to be a “full service” mobile network operator, focusing on data as a primary offering.
Its major assets constitute spectrum licences, including an allocation in the 1 800 MHz band, along with the other major operators, as well as an allocation in the sought after 2 600 MHz band, where Rain holds the only licence.