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Unlocking value at the heart of the return of Old Mutual – Nethengwe

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The company logo of Old Mutual Plc at the headquarters in Johannesburg. Picture: Nadine Hutton/Bloomberg
The company logo of Old Mutual Plc at the headquarters in Johannesburg. Picture: Nadine Hutton/Bloomberg

The recent listing of the OM Limited was more about unlocking shareholder value than keeping in line with political tides.

In an interview with City Press, managing director of Old Mutual (OM) Mass and Foundation Cluster (MFC), Clarence Nethengwe said that the listing, which was announced earlier this year after the Competition Tribunal rubberstamped the acquisition of London-based Old Mutual Plc by the newly incorporated OM Limited, was a sign of the confidence in sub-Saharan economies.

“It’s quite significant because we are effectively demonstrating confidence in the growth potential of South African economy and the continent as a whole.”

He pointed out the secondary listings in Namibia, Zimbabwe and Malawi was an additional effort to unlock shareholder value.

Nethengwe said at the announcement of interim result later in August, the company would communicate its immediate ambitions to the market.

“It’s all about us coming back to Africa and particularly South Africa where it all started in 1845,” he said.

He said the move had more to do with unlocking shareholder value rather than change in government’s policy direction.

“We will strictly focus on unlocking shareholder value because we believe it was trapped in the group business that we had with four separate business which had very little in common,”

The company has previously announced that it was looking at nominal GDP plus 2% as its growth rate target.

According to the company’s agreement with the economic development department and condition of the competition Tribunal’s approval earlier this year, there was supposed to be 25% BEE ownership within three years after listing and within five years OM Limited BEE ownership must be of at least equal to that of its best empowered peer.

The parties also agreed that there would not be job losses resulting from the merger and an amount of R500 million would be ring-fenced for an Enterprise Supplier Development Fund.

At the time of the approval the company said OM Plc had a market capitalisation of R186.2 billion, the United States-based Old Mutual Asset Management (OMAM) was at R23.5 billion, Nedbank at R124.1 billion while Nedbank and Quilter would be owning 54% of Nedbank on listing and then go down to 19.9% after listing.

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