Zarclear, African Phoenix negotations continue

ZARCLEAR Holdings and African Phoenix Investments said yesterday that the merger talks between the two companies were ongoing, after they were first revealed at the beginning of last month.

This comes after the boards of directors of Zarclear and African Phoenix agreed in principle on December 3 to the implementation of a series of transactions to give effect to a merger of Zarclear and African Phoenix.

“Each of African Phoenix ordinary shareholders and Zarclear shareholders are advised that discussions between African Phoenix and Zarclear in respect of the proposed merger remain ongoing and, accordingly, each of African Phoenix shareholders and Zarclear shareholders should exercise caution when dealing in their respective shares until a further announcement in respect of the proposed merger has been made,” the group said in a joint statement.

Last month African Phoenix Investments announced that it was considering a merger with new shareholder, financial services group Zarclear, after Zarclear paid R245 million in August for a 22 percent stake in African Phoenix Investments.

Zarclear’s current portfolio consists of investments in Stenprop Limited, Peregrine Capital Hedge Funds and foreign cash balances.

The respective boards of directors of Zarclear and African Phoenix have considered the capital base and structure, the cost base, the empowerment credentials and the strategic options of both companies and are of the view that there is a strong operational and capital markets rationale for the proposed merger.

African Phoenix explained that the proposed merger would position the merged entity as an investment holding company that was able to execute on its strategies of private equity and market infrastructure investments.

Meanwhile, African Phoenix also advised its shareholders that following engagement with various shareholders, it had decided, irrespective as to whether the proposed merger is to be implemented, that the API Capital Fund partnership be unwound.

The group said that a replacement general partner would not be appointed following the removal of API Capital as general partner, effective from December 31, 2019.

“The API Capital Fund Partnership will accordingly be dissolved in accordance with the partnership agreement and the B ordinary shares held by API Capital cancelled,” African Phoenix said.