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HCI BUYS 30% OF BFS CAPITAL FOR R74 MILLION

BFS CAPITAL LIMITED ANNOUNCED TODAY THAT HOSKEN CONSOLIDATED INVESTMENTS LIMITED (HCI) WILL ACQUIRE A 30% INTEREST IN BFS CAPITAL LIMITED FOR APPROXIMATELY R74 MILLION WITH EFFECT FROM JUNE 15, 1998. HCI, A LISTED INVESTMENT HOLDING COMPANY, IS CONTROLLED BY THE INVESTMENT TRUSTS OF THE NATIONAL ONION OF MINEWORKERS AND THE SOUTH AFRICAN CLOTHING AND TEXTILE WORKERS’ UNION.

THE NBS BOLAND GROUP, NOW PART OF THE RESTRUCTURED BOE, PREVIOUSLY OWNED A 49,7% STAKE WITH BFS CAPITAL MANAGEMENT AND STAFF OWNING THE REMAINING 50,3%. A R95 MILLION RIGHTS ISSUE TAKEN UP BY HCI AND BFS CAPITAL MANAGEMENT FROM 15 JUNE WILL RESULT IN A NEW SHAREHOLDING STRUCTURE WITH HCI AND NBS BOLAND EACH HOLDING 30% AND BFS CAPITAL MANAGEMENT AND STAFF 40%.

EXPLAINING THE RATIONALE FOR THE DEAL, IAN MATTHEWS, MANAGING DIRECTOR OF BFS CAPITAL, SAID: “WE HAVE BEEN WORKING CLOSELY WITH HCI OVER THE PAST YEAR ADVISING ON A NUMBER OF LARGE TRANSACTIONS AND HAVE FORMED A STRONG RELATIONSHIP. IT BECAME APPARENT THAT BOTH HCI AND OURSELVES HAD MUCH TO GAIN FROM THE TRANSACTION, WITH HCI AND ITS BROAD SHAREHOLDER BASE BRINGING INCREASED DEAL FLOW TO BFS CAPITAL AND BFS CAPITAL CONTRIBUTING TO THE CONTINUING GROWTH OF HCI.”

THE STATED GOAL OF HCI, WHICH HAS A MARKET CAPITALISATION OF MORE THAN R3 BILLION, IS TO TAKE STRATEGIC INVESTMENTS IN WELL-MANAGED BUSINESSES WITH STRONG GROWTH POTENTIAL IN THE AREAS OF INFORMATION TECHNOLOGY, FINANCIAL SERVICES, MEDIA, TELECOMMUNICATIONS AND GAMING. BFS CAPITAL ADDS SIGNIFICANTLY TO HCI’S INVESTMENT IN FINANCIAL SERVICES.

HCI’S CHAIRMAN, MARCEL GOLDING, EXPRESSED CONFIDENCE IN THE TRANSACTION. “THE INCREASED CAPITAL BASE NOW AVAILABLE TO BFS CAPITAL ALLOWS FOR ITS EXPANSION INTO OTHER NICHE FINANCIAL SERVICES ACTIVITIES. ULTIMATELY, THE GROWTH AND SUCCESS OF BFS CAPITAL WILL BENEFIT HCI’S SHAREHOLDERS,” SAYS GOLDING. BFS CAPITAL CONTINUES ITS RAPID EXPANSION, TRIPLING PROFITS THIS YEAR TO R12 MILLION. A FULL-SCALE TREASURY OPERATION IS BEING SET UP AND BFS CAPITAL IS ALSO MOVING INTO PROPERTY DEVELOPMENT. “THE MARKET SHOULD ANTICIPATE A BRAND-NEW CORPORATE IMAGE FOR BFS CAPITAL IN THE COMING MONTHS, WHICH WILL BETTER REFLECT BFS’S POSITION IN THE MARKET,” COMMENTS MATTHEWS. “WE ARE CONVINCED THAT THE HCI CONNECTION, TOGETHER WITH THE SUPPORT OF NBS BOLAND, PROVIDES BFS CAPITAL WITH A STRONG BASE FROM WHICH TO CONTINUE EXPANSION,” CONCLUDES MATTHEWS.

MARCEL GOLDING, JOHN COPELYN AND MOHAMMED AHMED WILL BECOME DIRECTORS OF BFS CAPITAL, FURTHER STRENGTHENING ITS BOARD. BFS CAPITAL WILL APPLY FOR A BANKING LICENSE LATER THIS YEAR AND PLANS ARE AFOOT TO SEEK A LISTING ON THE JOHANNESBURG STOCK EXCHANGE NEXT YEAR.

Source: HCI