Royal Bafokeng increases stake in Zurich South Africa

(l-r) Gerard de Rauville, chairman, ZICSA; Annette Court, CEO, Zurich Europe; Mmemogolo Semane Molotlegi, Queen Mother of the Royal Bafokeng Nation; Niall Carroll, RBH Chief Executive and Guy Munnoch, CEO, ZICSA celebrate RBH?s increased investment in ZICSA.

Royal Bafokeng Holdings (“RBH”) has increased their investment in Zurich South Africa (“ZICSA”) by taking an additional 15.1% in the company, following a deal with majority shareholder Zurich Insurance Company Limited Switzerland (ZIC).

The deal, agreed in December 2009, but subject to regulatory approvals, and transacted through wholly-owned subsidiary Royal Bafokeng Finance (RBF), will bring the effective RBH stake in ZICSA to 25.1%, adding to the initial 10% acquired in April 2005.

The commercial rationale for the investment has a number of dimensions, according to RBH Chief Executive, Niall Carroll. “In the first instance, it continues the stated strategy of de-risking of the RBH asset base, thereby increasing our involvement in the national economy. Secondly, it is an investment in an attractive sector in its own right that has the corollary benefit of further broadening the community’s access to cost-effective financial products. Thirdly, why specifically ZICSA? Our relationship goes back to 2005. We see ZICSA as an organisation with local knowledge and capability that has access to global best practice and expertise.’’

“The criteria for all RBH investments are twofold. It has to deliver sustainable benefits to our community, and it has to improve the economic well-being and quality of life for the Bafokeng nation. Through this transaction we get the opportunity to invest in a global business with a strong footprint in the local market, so it meets our criteria perfectly,” commented Carroll.

“ZICSA stands to significantly benefit from the increased RBF shareholding,” said Guy Munnoch, Chief Executive of ZICSA. “Alongside the financial opportunities, this investment places us in a great position to make a meaningful contribution to the community, which we see as an important role for us to play.”

ZICSA has undertaken to fund specific projects nominated by RBH in areas such as social upliftment and empowerment financing. These projects support various organisations and include youth development programmes, a project aimed at the development of a mathematics and science library and organisations that assist those affected and infected by HIV/AIDS.

“These initiatives demonstrate ZICSA’s commitment to the promotion of a transformed, vibrant and competitive financial sector that reflects the demographics of South Africa. We believe that a meaningful participation in the mainstream economy by previously disadvantaged people is essential for the success of the South African economy and democracy,” said Munnoch.