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Business Reporter
FBC Holdings has divested from Turnall Holdings after shareholders unanimously approved the proposal. The shareholders will be settled through a dividend in specie arrangement. Disposal of Turnall through a dividend in specie was viewed by the group as the most feasible approach set to achieve the objective of transferring the value in Turnall shares to shareholders of FBC holdings.
The group’s wholly owned banking subsidiary, FBC bank acquired a 58,32 percent equity investment in Turnall in 2010, through realisation of pledged security on a non performing loan. FBC Holdings chairman Mr Herbert Nkala told the company’s EGM last Friday that there was need for FBC Holdings to rationalise and consolidate its shareholding structure by removing non-core business from its portfolio and in order also to meet regulatory requirements regarding the holding of non-banking assets.
“The group has always had intentions of disposing its entire shareholding in Turnall at the most opportune time in light of the fact Turnall’s acquisition was a result of realisation of pledged security on a non-performing loan. However in view of the prevailing liquidity, FBC has so far been unsuccessful in finding a cash buyer for Turnall,” said Mr Nkala. “The Group will be able to focus more on its primary financial services operations.”
Mr Nkala said the transaction will not have a significant impact on FBC Holdings in terms of the Net Asset Value (NAV). The NAV post the transaction will slightly go down to 0,13 cents compared to 0,15 cents prior to transaction as at 30 June 2014. He said the current market price of FBCH which has averaged 11,5 cents over the last 12 months does not equate to the NAV with or without Turnall. The impact of the transaction on the Group will be to reduce profitability for the year by $6,8 million as a result of the difference between Turnall’s net asset value and its market value. The Group will however remain profitable.
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