SPECIALIST merchant banking player BFS Capital has found its black empowerment partner in Hosken Consolidated Investments (HCI), which will buy 30of BFS Capital for about R74m with effect from June 15. HCI, a listed investment holding company with a market capitalisation of more than R3bn, is controlled by the investment trusts of the National Union of Mineworkers and the SA Clothing and Textile Workers’ Union. HCI, Super Group and Capital Alliance said in a recent cautionary notice that they were in talks about merging their respective interest in Unibank Group and Capital Alliance Life. It is believed that Capital Alliance Life and Unibank will merge. BFS Capital and HCI said a R95m rights issue taken up by HCI and BFS Capital management from 15 June 1998 would result in a new shareholding structure, with HCI and NBS Boland each holding 30and BFS Capital management and staff 40 The NBS Boland Group, now part of the restructured BOE, previously owned a 49,7stake in BFS Capital, while management and staff owned the remaining 50,3 “When the time comes to pay for the share in BFS Capital, HCI could take on debt to fund it, or we could issue HCI shares. We are still weighing up the options” said HCI chairman Marcel Golding. He, John Copelyn and Mohammed Ahmed, directors of HCI, will become directors of BFS Capital. Golding said HCI’s stated goal was to take strategic investments in well managed businesses with strong growth potential in information technology, financial services, media, telecommunications and gaming. “We have a number of new transactions in the pipeline” he said. BFS Capital’s MD Ian Matthews said BFS Capital would apply for a banking licence this year, and plans were afoot to seek a listing on the Johannesburg Stock Exchange next year. “A full-scale treasury and asset management operation is being set up. We are talking to a number of institutions. There are alternatives. No finality has been reached yet” he said. Explaining the rationale, for the BFS Capital and HCI deal, Matthews 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”.

Source: Business Day