S.Africa's Mvela Group Sells Mvela Resources Stake

By Reuters Posted 18 July 2006 @ 08:54 pm EET     Print     Reprint     E-Mail     Comments

JOHANNESBURG (Reuters) - South African investment firm Mvelaphanda Group has agreed to sell a 22.9 percent stake n Mvelaphanda Resources to Mvelaphanda Holdings in a 1.183 billion rand deal, the firm said on Tuesday.

Mvela Group said it would sell 38.147 million Mvela Resources shares at 31 rand per share. Mvelaphanda Holdings is unlisted but is a material shareholder in Mvela Group.

The proceeds of the sale will be used to pursue Mvela Group's strategy of investing in quality investments and cash generative businesses, the company said in a statement.

"The proceeds, when combined with Mvela Group's existing liquid funds, would give it a cash pile of around 1.5 billion rand," Mvela Group chief executive Stephen Levenberg said in a statement.

He added that Mvela Group will shed an investment in a non-core sector, with the ability to now focus on nurturing and growing an industrial and financial group of magnitude.

In April this year a 20 rand per share deal to sell the Mvela Resources stake to black-controlled Incwala fell through after it refused to sign a non-competition agreement.

Mvela Group is one of South Africa's leading black contorolled firms and its investments include a stake in South Africa's biggest retail bank Absa, while Mvela Resources' include 15 percent of miner Gold Fields.

By 0719 GMT shares in Mvela Group had risen 2.6 percent to 7.90 rand, while Mvela Resources was 2.27 percent lower. The JSE Securities Exchange's mid-cap index was 0.31 percent firmer.