GIPF’s N$2 billion Capricorn deal approved

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A toast… Front (from left): Thinus Prinsloo (managing director of Capricorn Group), Goms Menettè (chairman of the Board of Trustees of GIPF), Koos Brandt (chairman of Capricorn Group and CIH), David Nuyoma (chief executive officer of GIPF) and Johan Swanepoel (vice-chairman of Capricorn Group and CIH). Back (from left): Melki Uupindi (legal services: GIPF), Jaco Esterhuyse, (chief financial officer: Capricorn Group), Baronice Hans (managing director: Bank Windhoek), Conville Britz (GM: investment at GIPF) and Joubert van Wyk (senior corporate finance consultant, investment banking, Investec Bank).

Edgar Brandt

Windhoek-The Government Institutions Pension Fund (GIPF), the largest institutional investor in Namibia, will fork out over N$2 billion to acquire a 25 percent interest in the issued ordinary shares of Capricorn Investment Group (CIG) Limited.

GIPF made a bid during the first quarter of this year for the Capricorn shares and the deal will now go through after it has met with all necessary regulatory approval.

In terms of the agreement, GIPF acquires 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 (Pty) Limited, at a negotiated total consideration in excess of N$2 billion.

As a result, CIH’s shareholding in Capricorn Group therefore decreases from 56 percent to 40.5 percent. The shareholding of GIPF in Capricorn Group increases 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.
Due to the substantial benefits to the group of having GIPF as a substantial shareholder, CIH decided to facilitate the transaction through the reduction of its shareholding.

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.

According to CIH, getting GIPF on board as a substantial shareholder will reduce both the capital risk and liquidity risk of the group.

The 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 in terms of total assets, which at December 31, 2016, stood at in excess of N$32 billion.

“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. 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. GIPF looks forward to a long term beneficial relationship with CIH and the Group,” said Goms Menettè, chairman of the Board of Trustees of GIPF, during the initial bidding process.

“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. 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 the 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. GIPF will have representation on the Capricorn Group board of directors. This will enable GIPF to contribute to the growth of important institutions such as Bank Windhoek, by providing input to the strategic direction of the company and growth funding”, said David Nuyoma, chief executive officer of the GIPF, when the bidding was first announced.

A revised Capricorn Group structure as at May 12, 2017, reflects the confirmed GIPF shareholding and also shows the restructuring of the group’s investments in Zambia and Botswana, with Capricorn Group now holding a 65 percent shareholding in Capricorn Investment Holdings (Botswana) Limited and a 97.9 percent effective shareholding in Cavmont Capital Holdings Zambia (CCHZ).

“Capricorn Group views these transactions as key to achieving our aim of diversifying our business interests and expanding our footprint in the geographical regions we operate in,” said Koos Brandt, chairman of CIH and Capricorn 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 shareholder, but also through their representation on the board of Capricorn Group,” Brandt said.

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