Financial Services – Strong working relationship grows into R74 million investment Cape Town – Hosken Consolidated Investments (HCI), the union-owned investment trust, would acquire a 30 percent stake in BFS Capital, the fast-growing financial services company, for R74 million, Ian Matthews, the managing director of BFS, said yesterday. A R95 million rights issue taken up by HCI and BFS Capital management from June 15 would result in a new shareholding structure. HCI and NBS Boland (now part of BOE) would each hold 30 percent and BFS Capital management and staff 40 percent, he explained. NBS Boland previously owned a 49,7percent stake, with BFS Capital management and staff owning 50,3 percent. Matthews said BFS had advised HCI on large transactions over the past year and had formed a strong relationship. “It became apparent that both HCI and ourselves had much to gain from the transaction. HCI and its broad shareholders base would bring increased deal flow to BFS Capital and BFS Capital contributing to the continuing growth of HCI.” He said HCI would open doors and create value-added opportunities for BFS. Marcel Golding, the chairman of HCI, expressed confidence in the transaction. “The increased capital base now available to BFS Capital allows for its expansion into other niche financial services activities”. The goal of HCI, which had a market capitalisation of more than R3 billion, was to take strategic investments in well-managed businesses with strong growth potential in the areas of information technology, financial services, media, telecommunications and gaming, he said. Matthews said BFS Capital continued its rapid expansion, tripling profits this year to R12 million. “A full-scale treasury operation is being set up and we are also moving into property development.” The market should anticipate a new corporate image for BFS Capital, which would better reflect its position. “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”. Matthews confirmed that BFS would apply for a banking licence this year and that the company planned a JSE listing next year. Proceeds from the R90 million rights issue would be used mainly to develop BFS treasury capacity and bolster the company’s asset management arm. Hosken’s shares closed up 25c at R8,75 in the JSE yesterday.

Source: Business Report