Transaction Capital, a prominent South African financial services group led by Jonathan Jawno, is set to boost shareholder value by separating its subsidiary, WeBuyCars. This strategic move aims to raise approximately R1.25 billion ($65 million) through capital-raising efforts, enhancing the group’s financial standing.
The plan includes a private placement of WeBuyCars shares, targeting an additional R500 million ($26 million), and a capital raise of up to R750 million ($39 million) to strengthen the overall position of Transaction Capital. These initiatives follow a portfolio evaluation, emphasizing the creation of shareholder value amid challenges faced by its subsidiary, SA Taxi.
Jonathan Jawno, Transaction Capital co-founder, holds 9.59-percent stake, steering strategic vision
As a founding member of Transaction Capital, Jawno holds a 9.59-percent stake in the group, making him the second-largest shareholder, trailing only behind Public Investment Corporation.
His ownership of 72,667,000 ordinary shares underscores his commitment to the group’s strategic vision. The decision to unbundle and list WeBuyCars is poised to address challenges faced in 2023, including mitigating debt, resolving the WeBuyCars put option liability, and settling outstanding payments.
WeBuyCars: Navigating challenges, driving growth with strong financial performance
Despite challenges faced in 2023, WeBuyCars demonstrated resilience and agility, posting a robust recovery in the latter part of the financial year. This positive momentum has continued into 2024, with key financial metrics for the four months ending January 31, 2024, revealing a 16 percent increase in revenue to R7.64 billion ($401 million) and a 20 percent surge in core earnings to R267 million ($14 million) compared to the same period in 2023.
Transaction Capital’s strategic move to unbundle and list WeBuyCars reflects its commitment to enhancing shareholder value and addressing challenges. The capital raised is expected to bolster the group’s financial standing, enabling it to navigate complexities in the market and position itself for sustained growth. Investors are keenly watching this development as the group charts its course in the dynamic financial landscape, aiming for a prosperous future.
