Black economic empowerment (BEE) financial services group Arch Equity is rapidly building up its asset base to become one of the largest BEE players in the Western Cape, with plans to list on the JSE Securities Exchange (JSE) before year-end.
Since being launched in May 2004 by CEO Desmond Lockey, an African National Congress MP since 1984, Arch Equity has acquired stakes in listed financial services group PSG Group at 17%, niche mass-market retail bank Capitec Bank at 14%, life insurer Channel Life Limited (effective 13%), Big Box Containers (30%) and comPress Publications Management (75%).
By August 31 2004, it had a net asset value per share of 132 cents, representing 33% growth from 99 cents six months earlier.
Lockey said the company has already started the process to list the company on the JSE and is hoping to have the listing completed by the end of this year.
He said Arch Equity’s intent is to be a long-term investor, as it wants to build lasting relationships with its partners. The group is not sector-specific, he confirmed, and will entertain any deal that creates wealth for the company and its shareholders.
Its acquisitions are set to continue as well, Lockey revealed. It is in the process of raising its stakes in both PSG Group and Capitec, to 20% and 15,3% respectively, and is acquiring an effective 4,5% stake in Unitrans, the listed transport and logistics group.
Should most of these purchases be concluded successfully, Arch Equity would have a net asset value, excluding Unitrans, of R190,5-million, or 154,3 cents per share. Unitrans currently has a market capitalisation of about R2,2-billion, making a 4,5% stake in the company worth about R99-million.
By comparison, Brimstone Investment Corp, the Western Cape’s largest BEE investment group, had a net asset value of 141,7 cents per share on August 31 2004. However, this would increase sharply should it successfully conclude the current transaction in which it is a partner in a BEE consortium that is acquiring a stake in Afrox Healthcare.
Arch Equity is 61% owned by black shareholders. Its chairperson is Nomazizi Mtshotishisa, who is also the chairperson of Telkom. Also serving on the board of directors are non-executive director Japie Moropa, currently chairperson of Securicor South Africa; executive director Piet Mouton; and non-executive director Jannie Mouton, currently chairperson of the PSG Group and member of many other boards. — I-Net Bridge