Alexander Forbes tests water for listing
Alexander Forbes starts series of road shows to increase investors awareness ahead of planned listing in second half in 2014.
Diversified financial services company Alexander Forbes started a series of road shows in October to increase investors awareness ahead of a planned listing in the second half in 2014.
Over the past two months Alexander Forbes has also started talks to dispose of its Trustee Services business in the UK, CEO Edward Kieswetter said on Wednesday.
"We have started with our road shows. In October we went to London. We have also met with local investors," Mr Kieswetter said, adding that the next stop was the US. "It’s not a book-building exercise. It’s creating awareness ahead of the book building."
Book building includes a process when companies go to investors to assess the price at which to offer an initial public offering and the demand for the shares.
Mr Kieswetter said Alexander Forbes was looking to start book building in June and July next year. "Our plan is to bank another year of good results. We will use these results to go to the market, which means we could be listing in the second half of next year," he said.
Alexander Forbes is looking for a strong shareholder that would back the growth story of Alexander Forbes in the long term.
The company is busy restructuring its balance sheet ahead of the planned listing next year.
In the year to end-March 2013, Alexander Forbes had debt of about R5bn. It has a R1.5bn high-yield term loan from a consortium of investors consisting mainly of shareholders.
It also has a R750m in "payment-in-kind" or PIK notes, and about R2bn in preference share funding.
Alexander Forbes has also obtained independent views from Rand Merchant bank and Deutsche Bank with regard to its optimal target capital structure.
The plan is to use proceeds from disposals towards paying debt. Last week Alexander Forbes said it had sold its cell captive business Guardrisk for R1.6bn and would use the net proceeds to reduce debt.
Asked about disposals, Mr Kieswetter said: "We are in discussions on Trustee Services."
Trustee Services is a UK business acting as an independent trustee.
As part of plans to refine its portfolio of companies Alexander Forbes has sold AF Consultants Actuaries UK to Jardine Lloyd Thompson for £18.5m.
Also in the UK, it sold its interest in Investment Solutions and in the Media Insurance Services Business early this year.
The Investment Solutions sale is pending regulatory approval. Mr Kieswetter said the sale in the UK did not mean the South African operations would be sold.
After the sale of Trustee Services in the UK the company was not looking to make further sales, Mr Kieswetter said. Alexander Forbes’ other businesses in the UK are Lane Clark and Peacock, a firm of financial, actuarial and business consultants, specialising in pensions, investment, insurance and business analytics.
Alexander Forbes Group owns 60% of Lane Clark & Peacock.
Internationally, Alexander Forbes also owns Alexander Forbes Offshore, a provider of company benefits employee solutions.