Key Points:
- Trustco Group, controlled by the van Rooyen family, cuts $238-million debt burden by converting it into equity, improving its financial health.
- The conversion includes family-held loans and outstanding purchase prices for mining assets, issued at a set share price.
- Trustco aims for long-term strength with a cleaner balance sheet, positioning itself for future opportunities in Namibia.
Trustco Group, a prominent investment holding company primarily owned by Namibian businessman Quinton van Rooyen and his family, has successfully executed a strategic move to convert substantial indebtedness into equity, effectively eliminating its debt burden and fortifying its financial standing.
The initiative, aimed at clearing legacy debt and bolstering its balance sheet, involves the conversion of NAD4.43 billion ($238.4 million) of debt into equity. This includes a NAD1.48 billion ($79.49 million) related party loan and NAD2.95 billion ($158.54 million) outstanding purchase price for mining assets. The conversion is based on an audited Net Asset Value (NAV) as of Aug. 31, 2023, with shares issued at a conversion price of NAD1.17 ($0.0637) per share.
Trustco’s debt conversion plan aims for equity growth
“This strategic move not only eliminates our significant debt obligations but also enhances our equity base,” remarked a Trustco spokesperson. The conversion, set to conclude by Aug, 31, 2033, is contingent upon regulatory approvals from the Namibian Competition Commission and Bank of Namibia, shareholder consent, and finalization of restructuring and settlement agreements with the International and African Lender Group.
The financial maneuver follows Trustco’s announcement of a new loan agreement that obviates the necessity for a previously issued cautionary statement. Originally due for repayment on March 31, 2024, the revised terms provide flexibility, allowing Next, the investment vehicle of the Van Rooyen family, to postpone repayment.
Family holds significant stake in company
Trustco Group, headquartered in Windhoek, operates across various sectors including banking, insurance, property, and wealth management. With a diverse investment portfolio and significant assets denominated in both U.S. dollars and Namibian dollars, the company is renowned for its robust asset allocation strategy.
Quinton van Rooyen and his family maintain a substantial 63.94-percent ownership stake in Trustco Group, underscoring their influential role in the company’s operations and strategic decisions. This ownership solidifies their position as key players within Namibia’s financial landscape.
The strategic conversion of debt into equity marks a pivotal step for Trustco Group, positioning it favorably for sustainable long-term growth and stability. With a renewed focus on high-quality assets and a strengthened financial foundation, Trustco is poised to capitalize on emerging opportunities and reinforce its status as a leading diversified player in the Namibian market.