BUSINESS - ECONOMY
| 2013-08-06Investec, Prudential, RMB, ABSA Stanlib lose millions
INVESTEC’S money manager and Sanlam have the most at risk in a looming bond default of at least R925-million (US$94-million) after the liquidation of First Strut, a South African engineering company. Namibian asset managers invest hugely in South African financial markets and it was not immediately clear yesterday if Namibians stand to lose money after the liquidation of First Strut.
Investec Asset Management invested R435-million in a First Strut note through a company called Bacarac Trading, according to court documents filed in Pretoria on July 16 by Leslie Matuson and John Louw, who were appointed as business rescue practitioners.
Sanlam Capital Markets purchased R263-million, Fairtree Capital took R131-million of the notes, Prudential Portfolio Managers bought R51-million, Rand Merchant Bank invested R50-million and Stanlib Asset Management acquired R22-million.
First Strut’s liquidation came after the murder of chairperson Jeff Wiggill last month in Soweto, southwest of Johannesburg. Wiggill’s shooting was a contract killing, the Johannesburg-based Star reported last week, citing the bail application of one of the men arrested for his killing.
First Strut, which supplied the transport, mining and power industries, was placed in provisional liquidation on July 16.
Investec Asset Management, which manages R40-billion in corporate debt, said the First Strut bonds were part of a high-yield institutional credit strategy.
“Clients can still expect a positive return for the year ahead,” the Cape Town-based money manager said in an emailed reply to questions.
FirstRand, owner of South Africa’s second-largest banking group which includes Rand Merchant Bank, loaned the engineering company R200-million and invested R50-million in the bond, Sam Moss, investor relations director of Johannesburg- based FirstRand, said in an emailed response to questions on Tuesday.
First Strut has R925-million of floating-rate notes outstanding, which RMB sold for the company, according to data compiled by Bloomberg.
While Stanlib said it couldn’t respond due to client confidentiality, Sanlam Capital Markets, a unit of South Africa’s second-biggest insurer and Prudential Portfolio Managers didn’t immediately respond to telephone or emailed requests for comments.
The business rescue process, which tries to protect a company from creditors in the hope it can be salvaged, failed after Louw and Matuson were unable to raise as much as R80-million in July.
Absa Group, controlled by Barclays, loaned First Strut about R30-million, according to its investment banking head, Stephen van Coller. Absa didn’t invest in the high-yield note, he said, adding that any losses will be covered by provisions for bad debts.
Investec said last week its banking unit loaned about R240-million to First Strut. Investec didn’t immediately respond to emailed questions.
– Bloomberg/ Mail and Guardian
Investec Asset Management invested R435-million in a First Strut note through a company called Bacarac Trading, according to court documents filed in Pretoria on July 16 by Leslie Matuson and John Louw, who were appointed as business rescue practitioners.
Sanlam Capital Markets purchased R263-million, Fairtree Capital took R131-million of the notes, Prudential Portfolio Managers bought R51-million, Rand Merchant Bank invested R50-million and Stanlib Asset Management acquired R22-million.
First Strut’s liquidation came after the murder of chairperson Jeff Wiggill last month in Soweto, southwest of Johannesburg. Wiggill’s shooting was a contract killing, the Johannesburg-based Star reported last week, citing the bail application of one of the men arrested for his killing.
First Strut, which supplied the transport, mining and power industries, was placed in provisional liquidation on July 16.
Investec Asset Management, which manages R40-billion in corporate debt, said the First Strut bonds were part of a high-yield institutional credit strategy.
“Clients can still expect a positive return for the year ahead,” the Cape Town-based money manager said in an emailed reply to questions.
FirstRand, owner of South Africa’s second-largest banking group which includes Rand Merchant Bank, loaned the engineering company R200-million and invested R50-million in the bond, Sam Moss, investor relations director of Johannesburg- based FirstRand, said in an emailed response to questions on Tuesday.
First Strut has R925-million of floating-rate notes outstanding, which RMB sold for the company, according to data compiled by Bloomberg.
While Stanlib said it couldn’t respond due to client confidentiality, Sanlam Capital Markets, a unit of South Africa’s second-biggest insurer and Prudential Portfolio Managers didn’t immediately respond to telephone or emailed requests for comments.
The business rescue process, which tries to protect a company from creditors in the hope it can be salvaged, failed after Louw and Matuson were unable to raise as much as R80-million in July.
Absa Group, controlled by Barclays, loaned First Strut about R30-million, according to its investment banking head, Stephen van Coller. Absa didn’t invest in the high-yield note, he said, adding that any losses will be covered by provisions for bad debts.
Investec said last week its banking unit loaned about R240-million to First Strut. Investec didn’t immediately respond to emailed questions.
– Bloomberg/ Mail and Guardian
