Two massive companies call it quits on the JSE
Sasfin Holdings Limited and Bell Equipment are set to delist from the Johannesburg Stock Exchange (JSE).
The JSE has bled companies over the last several decades, dropping from 616 in 2000 to just 284 at the end of 2023.
Although WeBuyCars, Rainbow Chicken and Boxer are/have listed on the JSE, many are still in major pain and looking to leave amid financial and reporting issues.
Sasfin’s delisting forms part of strategic repositioning aimed at unlocking value for Shareholders over the short to medium-term
As part of this transition, Sasfin Holdings and Sasfin Wealth Proprietary Limited, a wholly-owned subsidiary of the Company (Sasfin Wealth), have signed a framework agreement with Wipfin Investments Proprietary Limited, a wholly-owned subsidiary of Women Investment Portfolio Holdings Limited (Wipfin) and Unitas Enterprises Limited.
Unitas is a company owned by trusts, of which Roland and Michael Sassoon, the former and current CEO, are discretionary beneficiaries.
These shareholders wish to subscribe to shares in Sasfin Wealth in order to facilitate an offer related to the proposed delisting of all ordinary shares of Sasfin Holdings from the stock exchange operated by JSE Limited.
Wipfin and Unitas each propose subscribing for an 8.8% shareholding in Sasfin Wealth, with the funds from the proposed Subscriptions for Cash enabling Sasfin Wealth to offer shareholders a price of R30.00 per ordinary share in Sasfin Holdings—higher than the current R26.00 share price.
It is further proposed that Sasfin Wealth management will acquire an effective 15% interest in the enlarged issued share capital of Sasfin Wealth, funded by Sasfin Wealth in whole or in part through a vendor finance scheme.
The group has undertaken several initiatives to unlock shareholders over the past 18 months, such as the disposal of its Capital Equipment Finance Business and Commercial Property Finance Business to African Bank for R3.2 billion, which is still subject to final regulatory approvals.
The group is also exiting its non-core activities, such as Specialised Lending and Foreign Exchange.
The group said that the delisting will allow for the following:
- Enhance the ability to effectively execute Sasfin Holdings’ strategy, which envisages further strategic action being easier to achieve in an unlisted environment;
- Eliminate ongoing costs associated with being listed, especially in light of the limited free float of Sasfin Holdings Shares;
- Provide those Shareholders who wish not to remain invested in an unlisted Sasfin Holdings with an opportunity to dispose of their Sasfin Holdings Shares at a meaningful premium to the prevailing market price ahead of the delisting; and
- Support the growth of Sasfin Wealth with material commitments by Sasfin Holdings’ two largest Shareholders and the management of Sasfin Wealth.
Bell Equipment
In addition, IAB plans to acquire the remaining ordinary shares in Bell Equipment, which it does not already own.
IAB plans to acquire the share in the heavy-equipment manufacturer for R53 per share, representing a 71% premium on the closing share price and a premium of 82.3% premium to the 30-day volume average of R31.00,
“IAB believes that for the Company to remain competitive and to adapt and grow in an increasingly competitive industry, the Company should be restructured to better position itself in the global arena and to enhance its agility and flexibility in decision making, which is not suited to the listed environment.”
“In the unlisted environment, the Board and management of the Company will be able to take a longer-term view in its approach to managing the Company and its business undertakings, particularly where certain strategic decisions are necessary which are unlikely to yield positive short-term financial results,” it said.
Delisting
Companies listed on South Africa’s Johannesburg Stock Exchange (JSE) are at a 30-year low, dropping 56% since 1998.
Data compiled by The Outlier showed that Listings peaked at 669 listings in 1998, but the dot-com crash led to 128 companies delisting within 2 years.
“Between 2003 and 2008, there was a brief resurgence with the introduction of AltX, which aimed at small- and medium-sized enterprises, but this was short-lived due to the global financial crisis.
Companies often delist because of mergers, acquisitions, or relocation abroad.
However, the JSE has found it challenging to attract sufficient new listings to compensate for these losses.
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