Le­bashe to in­crease BEE shares in Capitec

Sunday Times - - Business Times - By PERICLES ANETOS

● Capitec Bank’s em­pow­er­ment share­hold­ing is set for a shake-up as in­vest­ment group Le­bashe In­vest­ments says it is in talks to in­crease its stake in one of the fastest-grow­ing lenders by snapping up shares from its re­main­ing black share­hold­ers.

Le­bashe, which in­cludes prom­i­nent black busi­ness­men such as for­mer deputy fi­nance min­is­ter Jabu Moleketi, is buy­ing the re­main­ing 1.6 mil­lion shares in the bank val­ued at about R1.4-bil­lion from the bank’s em­pow­er­ment con­sor­tium, Coral La­goon In­vest­ments.

In 2007, Capitec is­sued 10 mil­lion shares to the con­sor­tium, which in­cluded ANC­con­nected in­di­vid­u­als like for­mer Jo­han­nes­burg mayor Parks Tau’s wife, Pil­isiwe TwalaTau and Gugu Mt­shali, wife of for­mer pres­i­dent Kgalema Mot­lanthe. At the time of the in­vest­ment, Coral La­goon paid R300-mil­lion for the 12.2% stake in Capitec at R30 a share.

In 2012, the PIC’s Isibaya Fund bought part of Coral’s stake and sold it to Le­bashe three years later, mak­ing it the big­gest black share­holder in Capitec.

At close of trade on Fri­day, the bank was val­ued at R104-bil­lion, more than 2 600% in­crease since the deal was first fi­nalised.

Last year Le­bashe sub­mit­ted an of­fer to ac­quire the re­main­ing 4.7 mil­lion Capitec shares owned by the Coral con­sor­tium but only man­aged to se­cure 3.1 mil­lion shares.

War­ren Wheat­ley, the chief in­vest­ment of­fi­cer at Le­bashe, told Busi­ness Times that they were now look­ing at ac­quir­ing the rest or po­ten­tially list­ing in a BEE scheme.

“It is not an exit en­tirely. [The deal] is look­ing at a mech­a­nism to cre­ate a liq­uid­ity event, so we are busy do­ing an in­ves­ti­ga­tion as to how best to do that,” he said.

When Capitec un­der­took its em­pow­er­ment deal more than a decade ago, it was sub­ject to an ev­er­green lock-in which re­quires that shares could only be sold to BEE in­vestors.

Capitec chief fi­nan­cial of­fi­cer An­dré du Plessis said the group was not aware of any ex­change of shares among its em­pow­er­ment part­ners and that the lock-in was still in ef­fect.

The ev­er­green lock-in cre­ates a sit­u­a­tion un­favourable to dis­count on the shares as the BEE share­hold­ers have a limited num­ber of po­ten­tial buy­ers that have both the cap­i­tal and cre­den­tials to pur­chase the shares, ac­cord­ing to Ajay Lalu, MD of Black Lite Con­sult­ing.

Fur­ther com­pli­cat­ing the sit­u­a­tion is the court ver­dict that favoured the once em­pow­ered al­ways em­pow­ered con­cept. But Lalu said it was highly un­likely that the once em­pow­ered al­ways em­pow­ered con­cept would spread across other sec­tors.

“Un­less there is a po­lit­i­cal shift in pol­icy di­rec­tion, I don’t think you would see the con­ta­gion ex­tend be­yond min­ing to other in­dus­try chap­ters,” he said.

Capitec’s black own­er­ship, both di­rect and in­di­rect, sits at 15.72%.

Coral La­goon did not re­spond to a re­quest for com­ment.

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