OWN CORRESPONDENT, Johannesburg | Tuesday 3.30pm.
PARLIAMENT on Tuesday approved legislation paving the way for life assurance giants Sanlam and Old Mutual to proceed with their plans to demutualise later in the year or early next year. The demutualisation will see the two giants convert from mutual societies into listed companies.
The National Council of Provinces approved a bill allowing the two groups to hold shares in their own holding companies and another authorising a one-off levy of 2,5% of their free reserves on listing to be used for a job creation fund.
Sanlam hopes to list before the end of the year while Old Mutual may not list until well into 1999. This means that Sanlam, which hopes to list on the Johannesburg Stock Exchange before the end of the year, can now ask its policyholders to vote on demutualisation ahead of final approval by the High Court. Old Mutual plans to list early next year.
Some economists have expressed concern that recent market volatility combined with high interest rates could reduce the estimated R100-billion market capitalisation expected from the two listing. Sanlam chairman Marinus Daling said the group’s plan is still on track despite the market turmoil.
“One has to finally take a view towards the end of the year on the state of the markets,” Daling said. “I cannot say irrespective of the state of the markets we will go, but the way it looks today, it is all systems go.”