Capricorn takes N$788m SA bet

Capricorn Group has made a binding offer to acquire an 81.6% stake in South African specialist equipment rental and asset-financing company Centrafin for an enterprise value of N$788.3 million.

The proposed acquisition marks a significant expansion by the Namibian financial services group into South Africa as it seeks to diversify its revenue base beyond Namibia and Botswana.

Centrafin, which is being acquired from Fonzosys, part of the Alviva Group, has a financing book of about R3 billion spanning a range of asset classes.

Capricorn said it would initially acquire 81.6% of Centrafin, with an option to increase its stake to 100% over five years.

The transaction follows due diligence covering Centrafin's financial, legal, tax, operational, regulatory and other affairs.

“This is an exciting and significant moment in the growth journey of Capricorn Group,” group chief executive David Nuyoma said.

“Our ambition is to continue building a stronger, more diversified and increasingly regional financial services Group, and the proposed acquisition of Centrafin represents a deliberate and meaningful step forward in that journey,” he added, 

The push over the Orange River 

Capricorn said Centrafin would give it an established presence in South Africa and add specialist asset finance and non-bank lending capabilities to its existing financial services businesses.

The group said it intended to retain the Centrafin brand and build on its existing customer relationships, expertise and entrepreneurial culture.

Centrafin managing director Jenny Gill said the company had evolved from a technology equipment rental business into a diversified asset finance house.

She said Capricorn had been selected as a long-term partner after an extensive process because of its alignment with Centrafin's values and ambitions.

The proposed transaction remains subject to several conditions, including the negotiation and execution of definitive agreements and approvals from the Bank of Namibia and South African Competition Commission.

It is also subject to compliance with applicable Namibia Securities Exchange requirements.

The conditions precedent must be fulfilled or waived by 31 January 2027, unless the parties agree to extend the deadline.

Capricorn said the acceptance of the binding offer did not constitute completion of the transaction and that it would update the market on material developments.

Softer earnings

The proposed expansion comes as Capricorn reported a weaker financial performance for the year ended 30 June 2026.

Profit after tax fell 6.4% to N$1.87 billion, from N$1.99 billion a year earlier.

The group attributed the decline to heightened funding costs, macroeconomic pressures and weaker economic conditions in Botswana.

Return on equity fell to 15.6% from 18.2%, while basic earnings per share declined to 343.7 cents from 367.3 cents.

Despite the weaker earnings, Capricorn's net asset value per share increased 6.7% to N$22.77.

The group also improved its loan-to-funding ratio to 83.6% from 88.8%, while its total risk-based capital adequacy ratio increased to 19.4% from 18.1%.

Capricorn maintained its ordinary dividend at 135 cents per share. Total dividends, however, fell from 171 cents per share in 2025 to 135 cents in 2026 after the group did not declare a special dividend.