South African used-vehicle powerhouse WeBuyCars (WBC) was listed on the Johannesburg Stock Exchange (JSE) at 09h00 this morning, 11 April 2024, and saw rampant demand from investors purchasing the company’s shares.
The exchange noted that there was “great demand” for WBC shares and that it has “not seen such activity around a listing in years,” reported Daily Investor live from the event.
As a result, the company’s 417,181,120 shares traded at close to R20 per share at the launch, well above the pre-listing price of R18.75, granting the business a market capitalisation of approximately R7.82 billion.
Following WBC’s separate JSE listing, parent company Transaction Capital disposed of all its shares in the company and unbundled to its shareholders.
Faan and Dirk van der Walt, the founding fathers of WBC, retain 10% of the company’s shareholding after the listing.
The below video published to X (previously Twitter) by Gary Booysen, director and portfolio manager at Rand Swiss, shows the eventful moment that WBC shares started trading live on the largest stock exchange in Africa.
#WeBuyCars $JSEWBC officially opens at R20.00. pic.twitter.com/NZWtxOadlh
— Gary Booysen (@GaryBooysen) April 11, 2024
WeBuyCars goes public
Transaction Capital first announced its intention to list WBC as a separate entity in January 2024 following a year of mixed financial results for the company, whose portfolio still includes major businesses such as SA Taxi and Nutun.
The organisation flagged a disappointing performance of SA Taxi in the post-Covid era harming the group as a whole and therefore shifted focus to “unlocking shareholder value” from its existing portfolio of companies, leading to the unbundling of WBC.
With the reshuffling of its core businesses, Transaction Capital said it aims to achieve the following goals:
- Significantly reduce the level of debt
- Eliminate the WeBuyCars put option liability
- Remove the cross-default triggers that are currently in place
- Settle the SANTACO equity cure of R285 million if payment is called upon.
“WeBuyCars is uniquely positioned in South Africa’s large and extremely relevant second-hand vehicle market, giving it substantial growth potential,” said Transaction Capital.
“In the 2023 financial year (‘FY2023’), WeBuyCars delivered on key performance metrics including increased volumes and growth in market share. Although earnings were down in the first half of FY2023, the business saw a strong recovery in the second half.”
The company expects this positive momentum to continue into 2024 in spite of adverse market conditions, such as high interest rates and low consumer confidence.
“The unbundling… will afford shareholders the opportunity to have direct access to a market-leading asset,” it said.
Join the discussion