Discovery Group, a leading financial services conglomerate led by South African businessman Adrian Gore, has secured approval to list two new bonds valued at R1.5 billion ($81.67 million) on the Johannesburg Stock Exchange (JSE) under its domestic medium-term note program. This marks a significant step for the company’s financing strategy.
The two newly issued bonds, detailed in filings with the JSE on May 14, have nominal values of R576 million ($31.33 million) and R924 million ($50.26 million). They carry floating coupon rates of three-month Johannesburg Interbank Average Rate (JIBAR) plus 1.4 percent and 1.59 percent, respectively.
Capitalizing on growth: Discovery’s bond offering
Guaranteed by Discovery Health Proprietary Limited and Discovery Vitality Proprietary Limited at 100 percent of their nominal value, these notes offer investors an attractive opportunity to participate in Discovery’s growth trajectory.
With a total program size of R10 billion ($544.56 million) and existing notes under the program amounting to R9.87 billion ($537.39 million), interest on the bonds will begin on May 15, 2024.
Discovery’s bond listing reflects its commitment to diversifying funding sources and optimizing its capital structure. Rand Merchant Bank, a division of FirstRand Bank Limited, acted as the dealer for these bonds, facilitating Discovery’s access to capital markets.
This approval signals confidence in Discovery’s financial health and growth prospects, paving the way for enhanced financial flexibility and strategic initiatives.
Discovery’s growth trajectory
Founded in 1992 as a medical insurer by South African businessmen Adrian Gore and Barry Swartzberg, Discovery Group has evolved into one of South Africa’s largest and most diversified global financial services firms. It operates across sectors including long-term and short-term insurance, asset management, savings, investment, and employee benefits.
Under Gore’s leadership, Discovery’s normalized operating profit for the full year ended June 30, 2023, rose by 24 percent to R11.66 billion ($634.56 million) from R9.384 billion ($510.54 million) the prior year. Normalized headline earnings rose 32 percent to R7.68 billion ($417.82 million) from R5.816 billion ($316.53 million).
