GIPF acquires 25% of Capricorn for N$2 billion

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Edgar Brandt

Windhoek-The Government Institutions Pension Fund (GIPF), the country’s largest institutional investor, is to spend over N$2 billion to acquire a 25 percent interest in the issued ordinary shares of Capricorn Investment Group Limited, the owners of Bank Windhoek.

In terms of the proposed agreement, GIPF will acquire a 15.5 percent interest in Capricorn Group from Capricorn Investment Holdings Limited (CIH) and a further shareholding of 9.5 percent from Namibia Strategic investments Limited at a negotiated total amount in excess of N$2 billion.

The transaction, which was facilitated by CIH, is still subject to the necessary regulatory approvals. If the deal is concluded, CIH’s shareholding in the Capricorn Group will decrease from 56 percent to 40.5 percent.

Capricorn Group is a financial services group that primarily operates as an investment holding company with interests in banking, insurance, asset management and microfinance, in Namibia, Botswana and Zambia.

Bank Windhoek, the flagship brand, is the largest locally-owned bank and the second largest commercial bank in the country. As at December 31, 2016, the Group had total assets in excess of N$32 billion.

GIPF’s asset value exceeds N$50 billion.

The shareholding of GIPF in Capricorn Group will increase to 26 percent, making GIPF the Group’s second largest shareholder.

CIH and GIPF will both fulfil the role of shareholders of reference to the Group, providing funding support to the Group in general and specifically to its banking operations.
“We are extremely proud that GIPF has selected Capricorn Group for such a substantial investment and believe that it bears testimony to their confidence in the Group to continue to deliver attractive, yet sustainable returns and growth to investors,” said Koos Brandt, chairman of CIH and Capricorn Group.

“Having GIPF as a shareholder of reference will further enhance the value proposition of the Group to investors.

“CIH decided to facilitate the transaction through the reduction of its shareholding, because it fully realised the benefits to the group of having GIPF as a substantial shareholder.

“GIPF showed their commitment to fulfil the role of shareholder of reference by offering immediate long-term senior debt funding of N$1.3 billion to the group as part of the transaction.

“Similarly, CIH also committed to provide debt funding to the Group amounting to N$900 million. Onboarding GIPF as a substantial shareholder will clearly reduce both capital risk and liquidity risk of the Group.

“We enter this new era with GIPF as shareholder with anticipation and confidence and look forward to the role they will play, not only as a shareholder, but also through their representation on the board of Capricorn Group”, Brandt said.

“The financial services industry is a key driver for both social and economic development. This transaction represents a key milestone for GIPF, as it will not only provide the requisite returns to fund beneficiaries, but will also contribute towards the more inclusive ownership of the financial services industry,” said Goms Menettè, chairman of the GIPF board of trustees.

“The Group has equity interests in Cavmont Bank in Zambia and Bank Gaborone in Botswana. Through these interests, GIPF will be able to facilitate regional co-operation, intra-regional trade and banking links with Zambia and Botswana.

“GIPF’s beneficiaries stand to benefit from exposure to the Capricorn Group, which has good prospects and continues to show consistent growth, particularly through its shareholding in Bank Windhoek,” he added.

“The transaction is of great significance for GIPF, as it provides GIPF with an opportunity to invest in high quality Namibian assets at a good price and at market-related returns on behalf of the beneficiaries of GIPF.”

GIPF CEO David Nuyoma said: “This transaction provides GIPF with a good avenue to invest locally, especially in light of increased local investment requirements and the reducing extent of dual-listed investments recognised as local assets.

“Through this transaction, GIPF will also provide growth funding to Bank Windhoek, in this way contributing to the long-term growth of the bank and financial stability of the Namibian banking sector.

“GIPF will also join CIH and Nam-mic Financial Services Holdings (Nam-mic) as strategic shareholders in the Group.”

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