SOUTH AFRICA – Platinum miner Royal Bafokeng Holdings (RBH) has agreed to take an initial US$32.9 million strategic stake in Transaction Capital, with the taxi financier saying it wants to further boost its financial position as it deals with the opportunities and uncertainty resulting from the Covid-19 pandemic.

Transaction Capital has said that Royal Bafokeng had purchased 12million shares representing 1.8% of its shares on November 19 in an off-market transaction.

In January, and subject to shareholder approval, the RBH could purchase a further 12.4 million shares at US$1.32 per share, bringing its holding to about 3.7%.

The US$1.32 price represents a 7.4% discount to the volume-weighted average price per share to end November 23.

“RBH is a highly regarded and respected SA investment firm and thus the board of the company is fully supportive of the specific issue which will be the start of a long-term strategic relationship between RBH and Transaction Capital”

Transaction Capital is one of the Johannesburg Stock Exchange’s success stories, and its share has more than doubled over the past five years, including about an 11% gain in 2020.

Its most significant businesses include SA Taxi Finance, which finances, sells and repairs minibus taxis, and Transaction Capital Risk Services, a debt collection service.

It recently agreed to pay US$118.6 million for 49.9% of used-vehicle retailer WeBuyCars and has options to increase its stake in the business to 74.9% in future.

The group has also said that, given the economic climate where many people are switching to second-hand vehicles, there is an opportunity to support and enhance some of the finance and insurance offerings of WeBuyCars.

In February, the group said three of its founders had sold shares worth US$105.4 million in a bid to diversify its shareholder base and improve liquidity.

Jonathan Jawno, Michael Mendelowitz and Roberto Rossi sold 69-million shares through their respective shareholding vehicles, via a bookbuild that was oversubscribed.

The transaction equated to about 10% of the company’s market capitalisation, with the founders each retaining about a 5.9% stake.

At end-September, the Public Investment Corporation (PIC) had a 15% stake in Transaction Capital and Old Mutual 10%.

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