The R500m deal between Conduit Capital and Mmuso Consortium first announced in December 2021, which would have injected capital in exchange for the right to subscribe for redeemable convertible preference shares, has collapsed.
Conduit Capital, which has stakes in insurance businesses, entered into an agreement with Mmuso Capital, which is acting on behalf of a group of investors under the banner Mmuso Consortium, which would have seen Mmuso gain a majority stake and give it the power to appoint a new CEO.
“Shareholders are advised that as certain conditions to the binding term sheet have not been fulfilled by the Mmuso Consortium, the proposed transaction has lapsed and will no longer be proceeding,” the Johannesburg-headquartered Conduit Capital said in a statement on the stock exchange news service (Sens) on Tuesday.
Conduit Capital said in December the rationale for the transaction was to enable it to inject growth capital into its insurance business, Constantia Insurance, whose management team was replaced in February 2020 as part of a turnaround strategy.
On Tuesday, it said it is now in “advanced negotiations” with other investors to recapitalise the business.
“If successfully concluded, the transaction may have a material effect on the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made,” Conduit Capital said.
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