Johannesburg - Banking group Absa disclosed on Thursday that it has acquired shareholdings in four companies listed on the JSE following client defaults relating to single stock futures.
Absa Bank, acting through Absa Capital Investor Services (ACIS), a division of Absa Capital, is a clearing member of the South Africa Futures Exchange (Safex).
The group said that as a consequence of certain clients failing to pay variation margin in respect of single stock futures contracts, the group has acquired a 28% equity stake in Pinnacle Point Group for R931.4m, a 16% stake in Blue Financial Services for R389.9m and a 10% stake in ConvergeNet Holdings for R86.5m.
It also acquired an additional 17% stake in Sekunjalo Investments for R36.5m. This brings the group's total stake in the group to 26%.
"The shareholdings in Pinnacle Point Group and Sekunjalo Investments are equity accounted for as associates. The investments in Blue Financial Services and ConvergeNet Holdings have been classified as available-for-sale financial instruments and any fair value movements will be reflected in the 'available-for-sale reserve' in equity.
"In view of the size of the shareholding in the companies listed above, the Group will be a strategic investor and work with them to realise value for shareholders," Absa stated.
"As a result of these events the Group has suffered minor losses that will be accounted for in its year end results to 31 December 2008, which will be announced on 9 February 2009," the banking group added.
- I-Net Bridge