PSG Group says it could unbundle Capitec holding

Investment specialists, PSG Group says it could unbundle its entire 30.7% shareholding in Capitec Bank.

Following requests from interested parties and to curtail speculation and uncertainty, the company confirmed that its board of directors is in the process of investigating, and is seriously considering, the potential unbundling of some or all of its shareholding in Capitec Bank Holdings Limited.

This would be subject to certain conditions being fulfilled, it said in a statement on Wednesday (29 April).

The rationale for the potential unbundling, PSG Group said, is that certain new legislation may potentially deem PSG Group to be a financial conglomerate.

This, it said, will substantially increase the administrative burden on the company, “and that, given the substantial discount at which PSG Group shares trade to its sum-of-the-parts value, the board believes such an unbundling may unlock value for PSG Group shareholders”.

Capitec’s success over the years has proven to be a cash-cow for PSG Group, however, earlier in April, it was forced to trim its final dividend following a decision by the bank to preserve cash during the Covid-19 pandemic.

André du Plessis, CFO of Capitec Bank, said: “PSG Group has been a supporter of Capitec since inception in 2000 and we value our relationship with them.

PSG Group explained its reasons for considering the potential unbundling of all or a part of their interest in Capitec to its shareholders in its cautionary of this morning. We understand their reasons and are comfortable with their decision of unbundling us in part or in full, or if they should decide not to proceed with their action.

“We have a good relationship with many of PSG’s shareholders who would be the ultimate beneficiaries in the case of an unbundling and we are not aware of any reason why this should change.

“Capitec is run independently with our own management and strategy and the company is merely the subject of the unbundling. We do not foresee a material impact on Capitec as a result of the corporate action.”

Read: PSG Group cuts dividend as Covid-19 concerns come into focus

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PSG Group says it could unbundle Capitec holding