Liberty makes pounds 250m call: South African insurer plans post-apartheid restructuring

LIBERTY Life, the South African life assurance company, wants to raise between pounds 250m and pounds 350m to fund post-apartheid investment, writes Robert Cole.

It will use some of the money to restructure its international network of subsidiaries. The rest will be spent enhancing Liberty Life's operations in South Africa.

The structure of Liberty's international network has become over-complicated during the past 10 years mainly because the old governmental regime imposed restrictions on the movement of capital out of the republic.

The restrictions meant subsidiaries had to take on borrowings which will be reduced by the planned capital raising.

Donald Gordon, Liberty's founder and chairman, said: 'A major international fund-raising of this magnitude conveys a clear message that South Africa and its leading corporations have re-entered the global financial community.'

Liberty is being advised by merchant bankers at Robert Fleming. Investors will be asked to buy convertible bonds. It is the first time a euro-convertible bond for a South African company has been issued to international investors.

Liberty is the fourth largest South African company. Among UK insurance companies, it would be the second largest. It owns 40 per cent of the Standard Bank Group, South Africa's leading commercial bank, and a string of investments in key companies and industrial sectors. It holds shares in Anglo American, De Beers, and South African Breweries.

South Africa's four largest bank nominee companies control 15.6 per cent, or 134 billion rand (pounds 24.4bn), of the Johannesburg Stock Exchange on behalf of undisclosed owners, the information consultancy McGregors said.

Andrew McGregor, a director, said legislation needed to be extended to ensure disclosure of owners of shares held by nominees.

'If the banks are to play a greater role in the equities market it is essential that legislation is extended to the disclosure of beneficial holders of shares by nominee companies,' he said.