RMB Holdings to give shareholders its R130bn FirstRand stake
The deal unwinds complex ownership structure.
South Africa-based financial services group RMB Holdings (RMH), has announced that it will be distributing its R130 billion stake in FirstRand to shareholders as part of a restructuring process.
RMH owns a 34 percent stake in FirstRand, the parent company of First National Bank. The move will see FirstRand, which runs South Africa‘s largest retail bank, split from its parent and original founders, prominent businessmen who via firms like RMH have played a role in the rise of a number of now major companies, many in financial services.
In an update to shareholders on Tuesday, RMH said the decision follows a review of its investment portfolio. Its board intends to distribute the FirstRand shareholding to RMH shareholders and also sell off its property assets.
The financial services holding company holds a basket of property development assets worth about R3.35 billion as of June 2019. It also has property-related financial obligations of about R2.60 billion, and property-related contingent financial obligations of up to R3.10 billion.
The share distribution and monetisation of its properties will need to obtain shareholder and regulatory approvals.
RMB did not say on Tuesday why it had chosen to distribute its shareholding in FirstRand, saying a detailed restructuring announcement would be made before the end of the first quarter of 2020.
In a separate announcement on Tuesday evening, investment holding company Remgro said it intends to distribute its stake in RMH, "in full or in part", to shareholders. Johann Rupert (pictured) is the chairperson of Remgro's broad. Remgro has a 28.2 percent stake in RMH.