Old Mutual seek to unbundle portion of Nedbank stake
OLD Mutual Limited has said it will unbundle a portion of its stake in Nedbank subject to relevant approvals.
According to a circular to shareholders, Old Mutual will unbundle all the Nedbank ordinary shares currently held by Old Mutual Emerging Markets Limited being 62,131,692 Nedbank ordinary shares and comprising 12,2 percent of the issued ordinary share capital of Nedbank to Shareholders by way of a distribution in specie.
“Following conclusion of Old Mutual’s managed separation process in 2018, Old Mutual retained a minority shareholding in Nedbank which represents 19,4 percent of the Nedbank ordinary shares currently in issue.
“This level of the Nedbank Stake was determined through discussions with Nedbank and the relevant regulators at the time in order to, amongst other things to ensure cohesive alignment with the ongoing arms’ length commercial arrangements between Old Mutual and Nedbank,” read part of the circular.
The company said following an internal review of the Nedbank Stake, the company believes that it is in the best interests of Shareholders to dispose of a majority of its Nedbank stake through the unbundling, as this would also allow Shareholders to participate more directly in the differentiated investment cases of Old Mutual and Nedbank.
It further reads that the decision was also to support the capital structure of the Old Mutual group (the “Group”), in particular within Old Mutual Life Assurance Company (South Africa) Limited (“OMLACSA”), whilst implementing changes required by the Insurance Act which took effect from July 1, 2018.
Old Mutual said it was committed to being a significant minority shareholder of Nedbank with the right to nominate a director to the boards of Nedbank and Nedbank Limited whilst retaining a right to review the Nedbank Stake as appropriate from time to time, in accordance with the protocols outlined in the relationship agreement concluded between Nedbank and Old Mutual on April 19, 2018.
Old Mutual said the remaining Nedbank Stake, held by OMLACSA, comprising 7,2 percent of the Nedbank ordinary shares currently in issue continues to support the capital structure of OMLACSA and will be optimally managed in line with the Group’s Financial Management Framework.