Retail tycoon, Christo Wiese, is one of the Cape’s wealthiest business personalities and has made a quiet (and rather unexpected) return to the financial services sector last month.
Wiese, via his controlling stake in low-key property investment company Tradehold, has bought out financial services business Mettle for an undisclosed sum. Mettle has strong roots in the Western Cape, having started out as Boland Financial Services (BFS) in the late nineties.
Wiese, of course, is best known for his investments in retail icons Pepkor and Shoprite, as well as lucrative sideline ventures in specialist investment company Brait and industrial supplies conglomerate Invicta. Wiese’s move back into financial services is most intriguing, especially considering his ambitious – but ill-fated – tilt at building a financial services and banking empire in the late nineties, as well as a past relationship with Mettle.
Back in the late nineties, Wiese became enamoured with an idea of owning a banking and financial services constellation. He charged into Paarl-based Boland Bank when the feisty little banking operation looked likely to be swallowed up by Absa. He then added to Boland Bank, and at one point was associated with well-known brands like Norwich Life, Board of Executors (BoE) and KwaZulu-Natal-based NBS.
Unfortunately Wiese’s banking ambitions coincided with the well-documented A2 banking crisis in SA (which saw smaller banks like Saambou, TBB, Regal Treasury and New Republic Bank falter, capitulate or selling out.) In the end, the debt-laden centre at what was then an enlarged BoE simply could not hold, and Wiese retreated from the world of banking with banking giant Nedbank rushing to the rescue of a straining BoE.
Interestingly, Wiese’s link to Mettle dates back to the business’ original guise as a niche finance house BFS. Wiese’s Boland Bank and later BoE held a major stake in BFS, which changed its name to Mettle in 1998, ahead of a short-lived listing on the JSE. Wiese even served a stint as chairman of BFS, relinquishing that position when Cape-based empowerment group Hosken Consolidated Investments (HCI) emerged as the dominant shareholder in the specialist business.
In mid-2008, a subsidiary of Bellville-based Metropolitan Holdings helped facilitate a management buyout of Mettle from HCI. There has not been a surfeit of news on Mettle in recent years, but a press release issued by Tradehold last month noted that Mettle still offered a wide range of services from corporate finance advice to credit assessment and debt management.
The financial status of Mettle is difficult to ascertain, as Tradehold indicated the transaction was clinched for an undisclosed sum.
However, in a prepared statement, Wiese said the investment in Mettle would represent less than 5% of the company’s current market value (which stood at around R1,85bn at the time of writing.) Wiese said Tradehold – which holds an array of properties in the UK as its main assets – acquired Mettle for the “entrepreneurial flair of its management and the new growth opportunities
it offered Tradehold.”
Wiese said Mettle would continue as a separate business within Tradehold and was expected to increase Tradehold’s earnings. Mettle CEO Friedrich Esterhuyse said the Mettle team was excited to be part of a listed company with access to potential new business opportunities.
Wiese contended there were considerable synergies between Mettle’s operations and two newer Tradehold subsidiaries, Reward Capital (which provides asset-backed loans to small to medium-sized businesses in the UK) and Reward Commercial Finance (which offers invoice-discounting facilities to the same target market.)
Although both these businesses are still in an early stage of development, Wiese noted the two Reward subsidiaries had grown rapidly in a market in which businesses struggle to obtain loans from banks and other financial institutions. Tradehold indirectly owns 71% of the two entities.
Interestingly Wiese – as a major investor in investment company Brait – has also taken an interest in newly listed micro-financing specialist Southern View Finance.
Southern View recently took over the unsecured lending business of Capfin, a subsidiary of Wiese’s highly profitable Pepkor retail conglomerate. Pepkor gets an origination fee from Southern View Finance in return.
Whether Mettle signals an intention by Wiese to move strongly into financial services again remains to be seen. History will show, though, that Wiese is not someone who does things in half-measures …
By Jenni McCann