Capitec sells a business for R201 million and then gives it R1.6 billion

Capitec has reached an agreement with Sasfin Capital to dispose of its rental finance subsidiary for R201 million. Capitec will also provide a R1.6 billion secured credit facility to the subsidiary to fund its ongoing rental receivables book.

The bank informed shareholders on Thursday, 9 July, that it plans to sell Capitec Rental Finance to the Sasfin Holdings subsidiary.

Capitec Rental Finance (CRF) is a rental finance business that Capitec established in 2011. It provides asset financing solutions for businesses across various industries. 

Capitec Bank acquired the business in 2019 as part of its acquisition of Mercantile Bank. It operates a rental finance book and has established a track record as a profitable, well- managed business.

However, Capitec explained that the business no longer aligns with its core strategic focus.

“The board believes CRF would benefit from integration with a specialist operator,” the company said in its notice to shareholders. 

“Sasfin, through its interest in Sunlyn, is a leading rental finance operator, with decades of sector-specific operating expertise and an existing rental finance business.” 

Capitec said this transaction allows CRF to be integrated with Sunlyn, a market leader better positioned to maximise the business’s value.

The bank told shareholders that the disposal consideration for CRF is R201 million, with the transaction subject to customary adjustments upon closing.

Along with the disposal, Capitec will provide a secured credit facility of R1.6 billion to CRF to fund the ongoing rental receivables book.