The founding shareholders of Trustco Group Holdings have offered to convert a N$1,4 billion loan into ordinary Trustco shares.
This offer was made by group chief executive Quinton van Rooyen and Next Capital (Pty) Ltd, according to a statement released on Monday.
Trustco manages investments in the insurance, education, property, resources, banking and finance sectors.
The offer entails that Next Capital, to which Trustco is indebted, would have the option to convert its N$1,4-billion loan into 1 050 billion new ordinary Trustco shares at a fixed price of N$1,41 per share.
The loan will stop accruing interest from the date of shareholder approval.
The conversion price and terms will not change, regardless of Trustco’s share trading price or listing status.
Should the entire loan be converted, Next’s shareholding in Trustco would increase to 69,8% of issued shares.
Trustco deputy chief executive Quinton Z van Rooyen says: “We have experienced significant fluctuations in our market capitalisation price, which decreased from an all-time high of N$15,6 billion in January 2019 to a mere N$237 million in July 2023.
“Based on the current price of 50 cents per share, the capitalisation offer is priced at a substantial premium to market price.”
Earlier this year, Trusco Group Limited reported a loss of N$250 million from a N$1,3 billion profit over the same period in 2022.
The company during the midterm review in June said Trustco has seen a decrease in its net asset value of 13,6%, moving from N$1,8 billion to N$1,5 billion.
The proposed offer is expected to have a positive impact on Trustco’s net asset value.
Just last month, the Bank of Namibia temporarily suspended Trustco Bank Namibia’s operations.
This came after the central bank expressed concern over Trustco’s internal environment and its failure to comply with orders and directives from the bank.
The full financial effects and the detailed terms of the capitalisation will be contained in a circular to shareholders, which will also include the date of the general meeting.