…20 percent shares purchaser satisfied after due diligence
By Hilary Mare
TRUSTCO’S move to dispose of 20 percent of the issued share capital of Legal Shield Holdings, a wholly-owned subsidiary of Trustco for N$1.2 billion has received a huge boost, after the ‘Purchaser’ – Riskowitz Value Fund LP confirmed that it was satisfied with the due diligence effected, Confidente understands.
According to agreement, Riskowitz Value Fund LP was required to conduct a due diligence on Legal Shield Holdings between 8 and 31 January 2018.
The Due Diligence was conducted by Deloitte South Africa upon instruction by Riskowitz Value Fund LP.
Trustco Group Holdings’ company secretary Amanda Bruyns indicated that the purchaser would go ahead to acquire the 20 percent in Legal Shield Holdings
“In accordance with the agreement, the Purchaser has confirmed that the due diligence is to its satisfaction and consequently, the Purchaser will acquire 20 percent of Legal Shield Holdings for the consideration,” Bruyns said.
Essentially, the transaction is a category 2, related party transaction requiring the approval ofshareholders in general meeting and Trustco is in the process of finalising the circularrelating to the transaction.
Consequently, the Issuer Regulation Division of JSE Limited has been approached and has granted Trustco an extension of the 60 day rulepursuant to paragraph 9.20(b) of the JSE Listings Requirements to dispatch the Circular toShareholders.
“The extension has been granted until 31 March 2018,” Bruyns added.
In an announcement on the SENS platform last November at the time of signing of the agreement, Bruyns indicated that the sale of the 20 percent would not change the control of Legal Shield Holdings or Trustco.
“In line with Trustco´s strategy, this transaction will provide future investors the opportunity to invest directly into asset classes that are geared to their specific portfolios.
“This transaction would significantly increase the available liquidity in Namibia. The consideration would be deployed across the Trustco group to accelerate growth in the other group segments,” it was announced at the time.
According to the company, the consideration for the transaction will be paid on the signature date of the agreement; Trustco will apply an amount received from Riskowitz Value Fund LP of N$600 million as a deposit towards the consideration and the balance of the consideration will be paid to Trustco within 12 months after the successful conclusion of the due diligence which was completed.
Furthermore the consideration will be held as cash reserves and utilised in the normal course of business.
Imperatively, the conditions of the transaction according to Trustco are subject to obtaining all regulatory approvals including but not limited to all necessary, approvals required in terms of the JSE Limited Listings Requirements for a transaction of this nature.
The regulatory approvals are necessary for the implementation of the agreement on or before 31 March 2018.
Other conditions include the Trustco obtaining all necessary approvals from its board and for the two parties to enter into a comprehensive shareholders agreement on or before 31 March 2018.
“Should the Purchaser conclude that the Due Diligence is not to its satisfaction, the Purchaser may elect to acquire 10 percent of Legal Shield Holdings in lieu of the deposit or demand from Trustco to repay the deposit on or before 31 October 2018,” the agreement reads in part.
“The effective date of the transaction will be the day on which the last of the suspensive conditions have been fulfilled.”
Legal Shield Holdings acts as the holding company for the Namibian insurance segment and a portion of the Investment segment of Trustco´s operations.
Legal Shield Holdings owns Trustco Life Limited and Trustco Insurance Limited which house the Namibian long term and short term insurance licenses respectively.
The Investment segment comprises inter alia, Trustco´s property, air services and the strategic media services segments. It specifically excludes the Banking and Finance, Educational business and Resources segments.
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