Patrice Motsepe’s ARC continues to bet on SA: “Still enormous opportunities here”


Bruce Whitfield interviews co-CEO Johan van der Merwe on the year-end results and future plans of African Rainbow Capital.

Patrice Motsepe’s African Rainbow Capital (ARC) has published its results for the fiscal year ended June 30, 2021.

The intrinsic value of the company’s portfolio rose 16.3% from R10.55 billion (June 30, 2020) to R12.27 billion at the end of June of this year.

ARC’s investments include a majority stake in phosphate explorer Kropz and a 100% stake in telecommunications provider Rain.

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Bruce Whitfield recounts how he asked mining tycoon Motsepe a few years ago why the company was continuing to invest in South Africa when many other companies wanted to leave the country.

He replied, “Well my future is here, my children’s future is here. Someone has to invest in this future.”

Patrice Motsepe and Precious Moloi-Motsepe. Image: screenshot, SABC stream

Whitfield interviews Johan van der Merwe, co-CEO and executive director of ARC.

Ongoing investment must come at a price, comments Whitfield, with the market price of the company’s assets significantly lower than the underlying recorded value.

“SA Inc. is significantly undervalued at the present time.”

Van der Merwe notes that the ARC has a number of investments which are start-up investments.

Rain – even though they had an 18 month bumper because of Covid and one of our few investments that had a tailwind because of it … people needed data …

Johan van der Merwe, co-CEO – African Rainbow Capital

Then we have TymeBank … the Ellandsfontein phosphate mine on the west coast which has drained cash … which will go into production by the end of this year …

Johan van der Merwe, co-CEO – African Rainbow Capital

So there is some light at the end of the tunnel when it comes to our seed investments starting to generate positive cash flow.

Johan van der Merwe, co-CEO – African Rainbow Capital

Van der Merwe adds that it is also important for ARC to selectively divest itself over time.

“I think every time we sell something we prove to the market that you don’t have to sell it at half its value … in many cases it’s more than the value. that we show. “

He notes that while ARC sees itself as a South African investment firm, that doesn’t mean it won’t invest elsewhere.

We follow our investments here. For example, if you look at TymeBank, they are now launching a bank in the Philippines …

Johan van der Merwe, co-CEO – African Rainbow Capital

We believe there are still huge opportunities in South Africa and hard times … present opportunities at the end of the day.

Johan van der Merwe, co-CEO – African Rainbow Capital

Listen to the conversation below:

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