Transaction Capital announced that it will proceed with the unbundling and listing of WeBuyCars.
In a SENS announcement released today, Transaction Capital said that, following further evaluation by the board, it has resolved to proceed with the unbundling and listing of WeBuyCars, subject to conditions.
In addition to the listing, the company also announced that WeBuyCars, Transaction Capital and I VDW Holdings have considered various capital-raising initiatives.
These initiatives include the WeBuyCars Share Issue, the Private Placement of WBC Shares and a proposed PreListing Capital Raise.
The WeBuyCars Share Issue and the proposed PreListing Capital Raise initiatives will enable WeBuyCars to make distributions to its shareholders, including Transaction Capital, to facilitate value realisation, the company said.
The Private Placement of WeBuyCars Shares will also unlock value for Transaction Capital through the proceeds received from the sale.
“The WeBuyCars Share Issue and the Private Placement of WBC Shares have been pursued with the respective parties at an early stage to provide certainty to all relevant stakeholders of the group – including shareholders and funders – that sufficient capital will be raised and placed to underpin the listing process.”
The proceeds from the various capital-raising initiatives will be utilised by Transaction Capital for, amongst other things, the settlement of debt at the holding company level.
Transaction Capital owns WeBuyCars, Nutun, and Mobalyz, which consists of SA Taxi and Gomo.
The company explained that, given SA Taxi’s disappointing performance in 2023 and the negative impact on the group, Transaction Capital has focused on unlocking shareholder value from its existing portfolio of companies.
The company said WeBuyCars is uniquely positioned in South Africa’s second-hand vehicle market and has great potential for growth.
In FY 2023, the company met its key performance metrics, including an increase in sales volume and an increase in market share.
Although earnings were down in the first half of the year, there was a strong recovery in the second half, and this positive momentum has continued into the 2024 financial year.
“If the unbundling is implemented, shareholders will have direct access to a market-leading asset.,” the company said.
“WeBuyCars stands out from other players in the local motor industry because of its proprietary artificial intelligence, data and analytics capabilities, which optimise the vehicle buying and selling process, and a prominent national footprint with 15 vehicle supermarkets augmented by 74 buying pods.”
“The listing of WeBuyCars, if implemented, will be founder-led together with their experienced and longstanding management team.”