Patrice Motsepe’s African Rainbow Capital Investments (ARCI) plans to delist from the Johannesburg Stock Exchange (JSE) and move from Mauritius to South Africa.
On 18 March 2025, the company announced that it would acquire all the ordinary shares in ARCI to facilitate the delisting of ARCI, ARC, and ARC SPV.
“Subject to the relevant approvals, the offer will result in the delisting of ARCI from the exchange operated by JSE and A2X Markets,” it said.
The company is offering shareholders R9.75 per share, which is a premium of 12.6% to the closing price of R8.66 per share on Friday, 14 March 2025.
The ARC offer also represents a 21.0% premium to the 30-day volume weighted average price of R8.06 per share.
African Rainbow Capital Investments will move from Mauritius to South Africa as part of the deal.
“ARCI will be required to follow the procedures set out in the Mauritian Companies Act, 15 of 2001 and section 13 of the South African Companies Act 71 of 2008,” it said.
The company explained that the planned delisting was prompted by numerous factors, including the limited public shareholding in ARCI.
Almost all of the African Rainbow Capital Investments shareholders are South African, and there is limited liquidity in the ARCI shares.
“The ARCI share price also does not reflect the true value of the investment in the ARC Fund and trades at a discount to the net asset value of the ARC Fund,” it said.
Simply put, African Rainbow Capital Investments shareholders do not receive the actual value of their investment.
“It is anticipated that the offer will result in a return of value for investors,” the company said in a press statement.
Moving back to South Africa
The company explained that when it listed, the rationale for incorporating ARCI in Mauritius was its business-friendly environment.
Mauritius also has tax treaties to attract capital from investors outside South Africa and facilitate investments outside South Africa.
“This strategy has not materialised to the extent expected,” the company said in its press statement.
African Rainbow Capital Investments attracted minimal international funding and no funding due to the Mauritian structure.
Another consideration in moving the company to South Africa was that ARCI is mainly invested in South African companies.
“The cost to operate and oversee the affairs and operations of ARCI in Mauritius has become increasingly expensive,” it said.
“In addition, changes to tax legislation since the ARCI listing has resulted in tax inefficiency for South African resident ARCI shareholders, vis-à-vis the underlying South African investments.”
