Vunani proposes unbundling private equity business

Image: FINANCIAL MAIL

Diversified financial services group Vunani is considering unbundling its private equity business and listing it separately, in a bid to improve transparency in its financial reporting, it said on Thursday.

“The transaction, if implemented, will result in Vunani being a focused financial services company, with a clear investment case, vision and purpose and which the board believes will be better understood by the market,” Vunani said in a shareholder statement.

The proposed spin-off will see Vunani’s private equity business list separately on the JSE within 12 months of the transaction, which is aimed at unlocking value for shareholders.

This will enable these two distinct businesses to operate in a more focused and efficient manner, allowing each of the businesses to achieve their respective strategic goals and to potentially unlock value for shareholders

“This will enable these two distinct businesses to operate in a more focused and efficient manner, allowing each of the businesses to achieve their respective strategic goals and to potentially unlock value for shareholders,” the company said.

The move comes months after the company announced a leadership shake-up aimed at better managing its various business divisions. It saw group CEO Ethan Dube being replaced by former Vunani Fund Managers CEO Butana Khoza in April.

The company said the drivers of growth and profitability between its financial services and private equity businesses were vastly different and had resulted in two distinct businesses within the same group.

The fund management and advisory company also focuses on coal processing and commodities trading. It blamed its financial performance on the its commodities trading business, which encountered disruptions at its main operating site.

The group posted revenue gains in its latest set of financial results, up 9% to R462m, though profit after tax tumbled 35% to R59.1m. Headline earnings per share, the primary measure of profit that strips out certain one-off items, also took a hit, decreasing to 0.5c from 54.7c in the prior year.

Its investment segment was heavily affected and only generated profit of R59.1m compared to R90.3m the year before due to lower carrying value of its assets and liabilities.

Shares in the company were unchanged at the close of markets on Thursday.


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