Transaction Capital, the South African financial services group led by multimillionaire businessman Jonathan Jawno, has announced its decision to unbundle and list one of its subsidiaries, WeBuyCars.
The strategic move aims to position WeBuyCars as an independent entity on the main board of the Johannesburg Stock Exchange (JSE), unlocking value for the group as well as its shareholders.
Transaction Capital charts course for enhanced shareholder value
Under the leadership of Jawno, a leading South African executive and one of the top investors on the JSE, Transaction Capital’s decision aligns with its objective to enhance shareholder value within its current portfolio.
The company issued a cautionary announcement regarding its intention to unbundle WeBuyCars, a process that involves distributing WeBuyCars (WBC) shares held by Transaction Capital to its shareholders, with simultaneous listing on the JSE.
The board, in collaboration with WeBuyCars founders, has been evaluating the potential benefits of this move since the initial announcement in December 2023. While specific details are yet to be finalized, the Board has preliminarily resolved to pursue the unbundling.
The decision to unbundle WeBuyCars comes after SA Taxi’s performance in 2023 fell below expectations, impacting Transaction Capital’s overall results. The announcement led to an almost 11-percent surge in Transaction Capital shares on the JSE, pushing its market capitalization beyond $340 million.
Transaction Capital’s WeBuyCars unbundling opens path to growth
Transaction Capital, a South African financial services group specializing in asset-backed lending and niche risk services, operates in South Africa and Australia as a non-deposit financial services company.
Jawno, a founding member of Transaction Capital, owns a 9.59-percent stake in the group. His stake, which translates to 72,667,000 ordinary shares, makes him the group’s second-largest shareholder, trailing only Public Investment Corporation — Africa’s largest fund manager
The recent decision to unbundle and list WeBuyCars is expected to benefit Transaction Capital as it seeks to address the challenges faced in 2023, including mitigating debt, resolving the WeBuyCars put option liability, and settling outstanding payments.
Despite the challenges, WeBuyCars, a key player in South Africa’s second-hand vehicle market, has demonstrated significant growth potential, and the unbundling is anticipated to provide shareholders with direct exposure to this market-leading asset.