Botswana registered Imara Holdings Limited says it has concluded the disposal of its South Africa’s stockbroking unit to a Johannesburg based company. At an earlier Extraordinary General Meeting (EGM), the company shareholders had given management the mandate to sell Imara S.P. Reid Proprietary Limited to MMI Strategic Investments Proprietary Limited for a consideration of P100 million.
This week, the Botswana Stock Exchange (BSE) quoted pan African investment banking group said it has completed the sale.
“Following the circular to shareholders dated 24 February 2015 (“Shareholders Circular”), the Board of Imara Holdings Limited (“IHL”) (“the Board”) is pleased to announce that all conditions precedent for the disposal of Imara S.P. Reid Proprietary Limited have now been fulfilled,” Imara announcement stated.
It said accordingly, the effective date of the disposal was 12 June 2015.
“The terms and conditions of the disposal remain unchanged from those disclosed in the Shareholders Circular and approved by Shareholders at the Extraordinary General Meeting on 24 March 2015,” it added.
Imara said in the past it decided to dispose the South African stockbroking unit on the back of an increase in online share trading, escalating regulatory and compliance costs, together with generally changing market dynamics that have led to growing pressure and competition for independent stockbroking companies in South Africa.
“In response, the Board took the decision to review various options relating to the Company and its future earnings contribution to the Group. These included the investment of further working capital required by the Company for additional carry facilities and the forthcoming shorter settlement period being introduced by the JSE Limited, and as an alternative the disposal of the Company,” said Imara in a market update.
“The Board’s view was that the Company, which remains an attractive investment within the stockbroking industry in South Africa, needs a parent willing and able to fund its growth needs.”
The purchaser, MMI Strategic Investments’ core business currently comprises of long and short-term insurance, asset management, savings, investment, healthcare administration, health risk management, employee benefits, and rewards programmes. According to Imara, several proposals were considered during the disposal process and the board believes the consideration being received, which is at a premium in excess of 40 percent to the current Net Asset Value of the Company, makes the disposal attractive to IHL. As a result, the board believes it is in the best interests of both IHL and ISPR to pursue the disposal. Imara has a presence in Angola, Botswana, Kenya, Malawi, Mauritius, Namibia, Nigeria, United Kingdom, Zambia and Zimbabwe.