Motsepe's ARC to use 'speed dating' to get units talking to each other

ARC, as the company is known, has more than 40 investments spanning asset management and life insurance to telecommunications and agriculture. Started about a year ago by pooling together Motsepe’s different interests, the company was set up to benefit from and support South Africa’s drive to encourage black participation in an economy still dominated by the white minority 24 years after racial segregation ended.

To kick-start more partnerships between the companies it holds stakes in and encourage more cross-selling, ARC will host a conference in November where the different businesses can “speed date”, co-Chief Executive Officer Johan van der Merwe said in an interview in Johannesburg on Thursday. “Once we’ve made the connection, they can go back to their respective companies” and discuss ways of teaming up, he said.

It’s already implementing the strategy of fostering cooperation with its soon-to-be-launched TymeDigital Bank and data-only mobile-network operator Rain, in which ARC owns 26.3%, Van der Merwe said. The two companies are in talks to share a distribution network made up of self-service kiosks at Pick n Pay Stores  and the retailer’s Boxer chain.

New investments

While the company would ideally like to launch TymeDigital this year, it would depend on regulatory approvals before the end of this month, he said. ARC agreed to buy Commonwealth Bank of Australia’s stake in the business after the Sydney-based lender reviewed its strategy.

The drive comes as ARC reports an 11% increase in its net-asset value to R9.56bn for the 12 months through June, its first set of results since listing its shares on the Johannesburg Stock Exchange in September last year. The stock has slumped 31% since.

The firm has ruled out a rights issue and would rather use debt to leverage its portfolio of investments, Van der Merwe said. ARC has a R1.1bn investment pipeline.

New investments are taking longer than expected to nail down as parties mull over price and strategy, Van der Merwe said.

“They are quite sizable transactions and they are strategic transactions,” he said. “There’s nothing wrong. It’s just taking longer because everyone wants to make sure it’s right at the end of the day."

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