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Trustco reduces gearing, sells 49% in Trustco Finance

Trustco reduces gearing, sells 49% in Trustco Finance

Trustco Group Holdings announced that it has reached an agreement with Finbond Group Limited to sell 49% of the shareholding in Trustco Finance (Pty) Ltd for a consideration of N$60 million.

According to the Johannesburg Securities Exchange News Service (SENS), the 49% stake is sold for R60 million of which half is payable by 31 July 2023 and the rest after the balance sheet of Trustco Finance has been restructured to reflect the intended sale. Trustco Finance must also put an unqualified audit on the table. The Finbond transaction is expected to be complete by 01 August 2023.

Trustco is a Namibian public company listed on the Namibian stock exchange, the Johannesburg stock exchange, and OTCQX stock exchange in New York. Trustco Finance (Pty) Ltd is a wholly-owned subsidiary of TBN Holdings Limited, the group’s main investment vehicle, which in turn is a wholly-owned subsidiary of the listed entity, Trustco Group Holdings.

Trustco Finance provides educational loans to students enrolled inter alia at the Institute for Open Learning, a significant distance learning tertiary education institution in Namibia.

Trustco initially invested in Trustco Finance in 2005 with an initial loan portfolio of N$5 million that has grown over a period of 18 years to become established as a large student loan lender with a current gross loan portfolio exceeding N$650 million.

Trustco Finance has disbursed loans of approximately N$1.3 billion to more than 62,000 students, and collected more than N$2.5 billion in installments. The Finbond transaction represents 2.47% of the total Trustco investment portfolio as at 31 August 2022.

The net asset value and net loss before tax of Trustco Finance were N$34 million and N$179 million respectively, based on audited results for the year ended 31 August 2022. The company is valued at N$183 million.

Finbond is a JSE-listed cash loan provider with an extensive branch network in South Africa and an emerging branch network in the United States and Canada.

The Finbond group’s biggest shareholder is the Riskowitz Value Fund with 36% shareholding. This fund has also invested significantly in the past in Trustco subsidiaries.

The Finbond transaction is subject to regulatory approval and a due diligence.

Trustco deputy Chief Executive, QZ van Rooyen, said “With Finbond’s expertise and presence in the market, we anticipate that synergies between Trustco Finance and Finbond will only strengthen. As the markets recognize the importance of diversification of investment assets, we believe that the diversification of investors in an asset can also contribute to positive growth. We are confident that our partnership with Finbond will unlock significant value in our investment.


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