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Trustco agrees to deal with Quinton van Rooyen to convert debt to equity

Trustco agrees to deal with Quinton van Rooyen to convert debt to equity

The accummulated debt owed to the Van Rooyen family by Trustco Group Holdings, has often proved to be a drag on financing from the capital market but this week the company announced that it has reached an agreement with its majority shareholder to convert this debt to equity.

In a statement released after the SENS announcement, the company said the deal should raise the listed entity’s net asset value by some N$1.5 billion, which will open up new financing opportunities in the United States market.

The deal makes provision for the conversion of N$4.4 billion paving the way for a planned US$100 million capital raise.

“This recapitalization is a crucial step to achieve our growth ambitions as well as complementing our current round of fundraising in the US markets,” said the Group Deputy Chief Executive, Quinton Z van Rooyen.

“Trustco will be well-positioned to attract further strategic investors and create long-term value for our investors after freeing up its balance sheet,” he continued.

In terms of the conversion agreement, the debt owed to Next Capital and Dr Quinton van Rooyen will be exchanged for new ordinary Trustco shares at a price of N$1.17 per share, a 350% premium over Trustco’s 90-Day Volume Weighted Average Price. Trustco is currently trading at around 40 cent per share.

The proposed deal must still obtain shareholder and regulatory approval will include an independent fairness opinion to ensure the transaction’s execution aligns with best governance practices.

The company said this transaction is the latest development in Trustco’s ongoing efforts to strengthen its overall market presence. “The previously announced agreement with Riskowitz Value Fund, forming part of a planned US$100 million capital raise in the US markets, reinforces Trustco’s growth trajectory and investment strategy.”

At the same time, Trustco is increasing its stake in the insurance and real estate portfolios in Namibia. The planned acquisition of an additional 11.35% stake in Legal Shield Holdings will increase Trustco’s ownership to 91.35%, with a N$468 million equity transaction.

“With a deleveraged balance sheet, Trustco can accelerate its diversification strategy to create value across its multi-sector investment portfolio.”


 

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