Motsepe's investment group misses target by a mile - but TymeBank, Rain boost value

Billionaire Patrice Motsepe's empowerment investment holding company African Rainbow Capital (ARC) increase its net asset value by 2.4% to R9.34, compared to R9.12 a year earlier.

“Whilst this is significantly below the medium to long-term expectation of 16% per annum, it  reflects the current economic environment,” the company said in a statement.

“Our investee companies generally experienced low consumer, business and investor confidence, which was exacerbated by political and policy uncertainty before and after the May 2019 national elections. The South African economy  and its currency were also negatively affected by exogenous factors, particularly a slowdown in global growth and changing politics,” the company said.

Its share price rose by 1.5% to R4.15 early in Thursday trading.

ARC’s intrinsic portfolio value climbed to R9.359bn, compared to R8.148bn a year ago. But its cash fell from R1.6bn to R725m.

The company said that two of its major investments, TymeBank and the mobile provider Rain, are meeting their milestones, with their fair value boosted by R640m over the past year.

ARC holds two-thirds of TymeBank, which has signed up 500,000 customers by end-June. Some 40% of these bank accounts are active.

Rain is well positioned to become a major player in the 5G data market, ARC said, and is tracking milestones.

But it has written down R480m of its investment in the mining group Kropz due to a delay in establishing the Elandsfontein  phosphate mine and processing plant on the West Coast. Commissioning of the mine and plant was initially scheduled towards the end of 2017.

ARC increased its interest in Alexander Forbes Group Holdings Limited from 8.9%  to 13.11% in a R308m deal.