Western Cape Business News

Send  Share  RSS  Twitter  23 Oct 2014

VENTURES: PSG's New Dealmaking


Recent Western Cape Business News

IT’S SOMETHING that most observers thought PSG would never contemplate. But the Stellenbosch-based investment company last month disposed of a portion of its holding in Cape-based mass banking specialist Capitec Bank.

To be fair to PSG, it’s not like a large chunk of Capitec has been sold off. Less than 4% of Capitec shares changed hands, and PSG reduced its stake in the bank from 32.2% to 28.5%.

Still, PSG cashed out a cool R800m by selling its Capitec shares to what CBN understands were large institutional investors from overseas. Interestingly, the cash-out comes not long after PSG spent R724m to subscribe for new shares in Capitec (at a price markedly lower than the shares it subsequently disposed of) in a recent R2bn rights issue held by the bank.

PSG indicated that it had sold the majority of its Capitec rights offer shares in order to repay the debt raised in order to participate in the rights issue as an anchor shareholder.

Naturally, some observers may ponder whether the Capitec holding may be further sold down. Maybe not…

PSG founder and chairman Jannie Mouton is known as an investor that backs ventures to the hilt, and PSG executives have reiterated that it remains positive about Capitec, its business and its management. It believes the Capitec investment will continue to be a significant contributor to the future success of PSG for years to come.

PSG has no intention to sell any more shares in Capitec.”

CBN reckons PSG’s decision to fortify its balance sheet may signal ambitious deal-making intentions in 2013 in some of its other investments. Whispers around the farm gates in the Western Cape suggest that PSG’s agri-business investor Zeder may be soon looking for a fresh injection of capital to pursue new opportunities.

Less audible, but no less intriguing, is a contention that PSG controlled private education venture Curro Holdings is about to embark on major expansion. There has long been talk that Curro – which this year has opened a school in Century City, might be looking at building a campus in the southern suburbs school belt. Some even reckon Curro could make an acquisition in Cape Town. Reddam perhaps?

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