Trustco Group Holdings Limited yesterday announced an agreement to convert N$4.4 billion of debt into equity.
This, the company stated, would pave the way for a planned U$100 million capital raised in the United States of America markets.
With a cleared balance-sheet, Trustco intends to accelerate its diversification strategy in an effort to create value across a multi-sector investment portfolio.
This most recent agreement is expected to increase the company’s net asset value by approximately N$1.5 billion.
“This recapitalisation is a crucial step towards achieving our growth ambitions, as well as complementing our current round of fundraising in the US markets,” said Quinton Zandre van Rooyen, deputy CEO of Trustco Group.
“Trustco will be well-positioned to attract further strategic investors, and create long-term value for our investors after freeing up its balance-sheet.”
Trustco continued that the conversion is a significant statement of support from the Van Rooyen family, demonstrating confidence in the company’s growth plans and strategy.
“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$1.17 (US$ 0.06) per share, a 350% premium over Trustco’s 90-Day Volume Weighted Average Price.
“This pricing aligns with the company’s audited net asset value per share as of 31 August 2023, and is contingent on obtaining shareholder and regulatory clearances, which will include an independent fairness opinion to ensure the transaction’s execution aligns with best governance practices,” reads the Trustco statement.
The statement added that 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.
This influx of capital from two long-standing shareholders, including the founding family, underscores the confidence in the company’s approach.,” Trustco stated.
Moreover, Trustco is also increasing its stake in Namibia’s insurance and real estate portfolios in Namibia with the planned acquisition of an additional 11.35% stake in Legal Shield Holdings.
Once approved, this will increase Trustco’s ownership to 91.35%, with a N$468 million equity transaction.
Meanwhile, Trustco further stated “Mining investment in West Africa has revealed promising diamond resource estimates, prepared by an independent competent person. With an estimated in-situ value of US$763 million, the Meya River Kimberlite Dyke represents less than 5% of the total combined strike lengths of the kimberlite domains within Meya Mining’s licensed Area”.