Transaction Capital founders sell R1.6bn of shares

In a move that will diversify the company's shareholder base. 

Transaction Capital, which finances the taxi industry in South Africa, said on Wednesday that three of its founders had sold shares worth R1.6 billion in order 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 percent of the company’s market capitalisation. 

“Both new and existing institutional investors participated in the bookbuild, further diversifying the company’s investor base and increasing foreign ownership. The bookbuild has increased the company’s free float, which is expected to improve share liquidity,” Transaction Capital said in a statement. 

Each of the founders still holds 5.9 percent in Transaction Capital and will continue to invest new capital into the company, the group said.

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

Transaction Capital has been one of the few success stories on the Johannesburg Stock Exchange in recent years as its bold strategy of providing credit where others have feared to tread has paid off.  

A combination of innovative financing solutions and debt collection capabilities under the leadership of CEO David Hurwitz has seen the company compound profits and dividends at rates far above its peers.