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Transaction Capital to sell Bayport stake

For R1.3 billion, to minority shareholder.

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.

Bayport Management, which operates unsecured lending businesses in six African countries andColombia, entered South Africa in 2005 and sold the stake in its South African unit to Transaction in 2010.

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.

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