South African financial firm Transaction Capital said on Wednesday it would sell back its majority stake in unsecured lender Bayport Financial Services for R1.3 billion to minority shareholder Bayport Management.
Transaction Capital said in a statement that “negative sentiment” around the unsecured lending industry has caused the market to ignore Bayport’s performance.
Analysts have warned about the pace of growth in unsecured lending – short-term loans not backed by collateral – in Africa‘s biggest economy.
Transaction said the price represents a multiple of 1.5 time book value, or 7.15 times headline earnings for the year to March 2013.
Shares of Transaction Capital were down 1.49% at R7.92 as of 16h51.