London-based Old Mutual Plc (OMP) is set to dispose of a 34,1% of its 54% equity stake in Nedbank to come down to 19,9% in the next six months after its managed separation strategy this week.
By Melody Chikono
Nedbank, which is South African-owned, has operations in Zimbabwe.
Old Mutual Zimbabwe CE Jonas Mushosho told businessdigest on the sidelines of the Old Mutual Ltd (OML) secondary listing on the Zimbabwe Stock Exchange (ZSE) on Tuesday that the group planned to distribute 34,1% of its Nedbank equity to shareholders under an ongoing process to dismantle the business into four standalone businesses in the United Kingdom, South Africa and the United States.
“Shareholders in Plc will get shares in OML and OM Wealth which listed yesterday (Monday) now called Quilter and has secondary listing on JSE (Johannesburg Stock Exchange). Six months after the listing they will also get part of their shares which OM has in in Nedbank because it currently has 54% of shares in Nedbank. OM is going to reduce its shareholding to 19,9 % so its balance will be distributed to shareholders of OM Plc but basically it means shareholders of OM Plc will be invested in a business which they understand or rather OM attract the African investment shares,” he said.
OML, a pan-African investment, savings, insurance, and banking group established in 1845 in South Africa, now with over 12 million customers and R1,2 trillion funds (over US$85 billion) under its management, listed on Tuesday on the Johannesburg Stock Exchange (JSE) with a standard listing on the London Stock Exchange (LSE) and secondary listings on the stock exchanges of Malawi, Namibia and Zimbabwe. The listing was the result of OMP managed separation strategy, announced in March 2016, to separate the London-based group into four independent, standalone companies to unlock value that was trapped within the group structure and remove costs arising from the London-based office, while creating long-term value for shareholders.
To implement the managed separation process, two separately listed entities were established:
l The new South African holding company, OML headed by Zimbabwe business executive Peter Moyo. It consists of Old Mutual’s Emerging Markets business, Old Mutual’s 54% holding in Nedbank and the residual OMP, that is, the remaining assets and liabilities of the business post the managed separation; and
l Quilter plc, which is the former Old Mutual Wealth UK operation that listed on the LSE, with a secondary listing on the JSE on June 25.
The remaining two businesses in the group are already independently listed entities: namely the Nedbank Group, which OML plans to reduce its shareholding to 19,9% by the end of the year; and the former Old Mutual Asset Management company based in the United States, whose majority shareholding was reduced to 5% as part of the managed separation process.
Mushosho said the remaining minority holding in Nedbank would provide a foundation for the continued strategic relationship between the two entities.
The transaction also comes after UK-based Barclays Plc reduced its controlling stake in Barclays Africa to 14,9% earlier in 2017.
“OM Plc as of now has become a subsidiary of OM Ltd and the residual plc in a net asset value surplus position. In other words, it has no assets than it got liabilities so it is actually bringing value to OM Ltd. Unfortunately I can’t share figures,” he said.
This week saw trades in OMP’s shares being suspended on the LSE, the JSE, the NSE and the ZSE.