TRUSTCO Group Holdings has moved to fully unwind a multi-million-dollar transaction after a failed takeover bid by its largest minority shareholder, Riskowitz Value Fund (RVF).
Trustco issued a statement yesterday confirming that 400 million shares will be returned to the company or suspended.
The reversal is on the N$468 million Legal Shield Holdings (LSH) transaction, originally approved in December 2024.
Trustco spokesperson Neville Basson says the move is a direct and material gain for remaining shareholders.
“Approximately 400 million shares are being returned to treasury, a direct and material gain for every Trustco shareholder,” he says.
According to Trustco, the deal was approved on the basis that it would not result in a change of control.
However, Trustco alleges that RVF used the very shares it received in the first tranche of the deal to requisition a meeting to fire the board and install its own nominees.
RVF, which holds approximately 23% of Trustco’s shares, had sought to remove the existing board and appoint new directors.
The relationship between the two entities, which seemed strong in 2024 when RVF signed a non-exclusive agreement to invest up to US$100 million (approximately N$1.6 billion) in hybrid capital, began to deteriorate after a failed share sale in LSH.
Trustco had secured approval to acquire an additional 11.35% stake in LSH from RVF for N$469 million.
However, the Trustco board later suspended the implementation of the sale and conversion agreement.
On 16 February during a general meeting the takeover bid was rejected.
To restore the capital structure of what Trustco calls RVF’s “repudiation” of the deal, 200 million shares already issued to RVF are undergoing formal rescission while the issuance of the remaining 200 million shares has been suspended.
Total shares in issue will decrease to approximately 992.2 million, effectively reversing the dilution of value for existing shareholders.
Trustco chief executive Quinton van Rooyen says RVF went against an agreement.
“Agreements have consequences. Those shares are coming back, and Trustco’s shareholders are the direct beneficiaries,” says Van Rooyen.
While the group celebrates this restoration of value, Trustco remains entangled in several high-stakes legal battles, including a US$21.4 million judgement involving Helios Oryx Limited.
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