Patrice Motsepe’s African Rainbow Capital Investments (ARCI), which owns stakes in TymeBank and Rain, is planning to delist from the JSE and redomicile in South Africa.
According to a statement to investors on Tuesday, the company has made an offer to buy back the shares it doesn’t own, pursuant to its delisting. Following that, ARCI will be redomiciled from Mauritius to South Africa.
“In the next financial year, the board of directors of ARCI will be assessing a delisting … while continuing to deploy strategies to narrow the discount to net asset value,” the company said.
“The ARCI share price does not reflect the true value of the investment in the ARC Fund and trades at a discount to the net asset value of the ARC Fund, meaning that investors in ARCI are not receiving the true value of their investment. It is anticipated that the [buyback] will result in a return of value for investors.”
Under the plan, ARCI shareholders will be offered R9.75/share in cash. According to ARCI, the offer price represents a premium of 12.6% to the R8.66/share price that the shares were trading at when the market closed on Friday, 14 March. The offer also represents a 21% premium on the R8.06/share 30-day volume-weighted average price.
To take advantage of the offer, shareholders must agree to and approve a board resolution to delist ARCI from the JSE and A2X Markets. A closing date for the acceptance of the offer is yet to be set, but a circular detailing the share offer and the mechanics of its proposed re-domiciliation is being prepared and will be shared with investors “in due course”.
Tax inefficiency
While unlocking value was given as the main reason for the share buyback, ARC Investments also cited an underwhelming ability to attract foreign investors as the major reason for deciding to redomicile the company from Mauritius to South Africa.
ARCI said that at the time of its listing that the rationale for incorporating in Mauritius was its business-friendly environment and the tax treaties Mauritius has to help facilitate investments outside South Africa, if required by international investors.
Read: TymeBank’s big growth plans: Q&A with CEO Karl Westvig
“This strategy has not materialised to the extent expected. The cost to operate and oversee the affairs and operations of ARCI in Mauritius has become increasingly expensive. In addition, changes to tax legislation since the ARCI listing, have resulted in tax inefficiency for South African-resident ARCI shareholders vis-à-vis the underlying South African investments,” said the company. – © 2025 NewsCentral Media
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