Planned restruc­tur­ing a boost to Rem­gro shares

Pretoria News - - NEWS - DI­NEO FAKU di­neo.faku@inl.co.za

IN­VEST­MENT group Rem­gro jumped 7.6 per­cent on the JSE in an­tic­i­pa­tion of a boost to the com­pany’s value fol­low­ing news of the planned restruc­tur­ing of JSE-listed Rand Mer­chant In­vest­ment Hold­ing (RMH).

RMH chief ex­ec­u­tive Her­man Bos­man late on Tues­day sug­gested the group give share­hold­ers its 34.1 per­cent stake in FirstRand, the par­ent com­pany of First Na­tional Bank val­ued at R130 bil­lion, as part of restruc­tur­ing of the group’s port­fo­lio of as­sets and li­a­bil­i­ties.

RMH’s share price surged 5.21 per­cent to close at R32.72. Rem­gro ended the day 6.12 per­cent higher at R196.

How­ever, FirstRand tum­bled on the news, fall­ing 1.53 per­cent and clos­ing at R67.50.

Bos­man said the group planned to sell off its prop­erty as­sets and would re­main listed on the JSE un­til the prop­erty process was com­plete.

RMH is the found­ing share­holder in FirstRand and is fo­cused on in­vest­ing in bank­ing and prop­erty busi­nesses.

Rem­gro, chaired by bil­lion­aire Jo­hann Ru­pert, is the big­gest share­holder in RMH, which con­trib­uted R2.4bn to Rem­gro’s head­line earn­ings in 2018 on the back of First Rand’s per­for­mance.

A de­tailed an­nounce­ment is ex­pected to be made be­fore the end of the first quar­ter of 2020.

Stel­len­bosch-head­quar­tered Rem­gro said it would fol­low in RMI foot­steps by dis­tribut­ing shares to share­hold­ers. “The board of Rem­gro has re­solved in prin­ci­ple, to pur­sue the dis­tri­bu­tion to share­hold­ers, in full or in part, of Rem­gro’s ex­po­sure to RMI and FirstRand,” said Rem­gro.

Michael Tre­herne, a port­fo­lio man­ager at Ves­tact As­set Man­ager, yes­ter­day said that the restruc­tur­ing was not cap­i­tal flight.

“It is just the restruc­tur­ing of a com­pli­cated hold­ing and out­dated hold­ing struc­ture,” said Tre­hern.

In Septem­ber RMI said it aimed to di­ver­sify its in­come stream and the dis­tri­bu­tion of its as­sets as nor­malised earn­ings jumped 7 per­cent in the year to June on its in­vest­ment in FirstRand.

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