Numsa to list financial services firm on JSE

The National Union of Metal Workers of SA (Numsa) is planning to list 360 Financial Services Group (360FSG), a subsidiary of its investment firm and owner of Doves funeral business, on the JSE in the next two years.

The financial services arm accounts for about 98% of Numsa Investment Company (NIC), a R1bn-turnover-a-year business, according to group CEO Khandani Msibi. It offers a range of financial products, including retirement savings, health insurance, vehicle and household goods insurance and legal cover to Numsa’s 340,000 members and the public.

“The reason [for the listing] is for us to release cash to execute other areas of our strategy, for instance for us to build the industrial division,” Msibi told Business Day in an interview.

“One of the things we get criticised for is that when factories are closed by employers — some because they are emigrating and some because they are mismanaged — we are unable to buy the factory because we don’t have the capital. So we want to release the capital so we can play in that space with Numsa members.”

Bold move
The planned listing is a bold move for the NIC, which was on the brink of liquidation in 2008 when its outstanding debts came to more than R250m.

The investment company, which employs more than 1,000 people, has three subsidiaries — 360FSG, Numsa Industrial Holdings, which owns a stake in MoFaya Beverage, and the Numsa Property Group.

The NIC is owned by the Manufacturing Workers Trust, with Numsa members as beneficiaries. However, there is no legal relationship between Numsa and the NIC.

They are “completely separate, though close to Numsa”, Msibi said. The decision to list 360FSG by 2020 had been communicated to Numsa, and a number of professional companies have been engaged to get the organisation “listing-ready”, he said.

Union investment companies are often at the centre of internal fights, with control over investment arms the main prize for factions. But Msibi said the NIC was structured in a way to create relative insulation for the company from union politics.

Still, the NIC works closely with Numsa as its members are a client base for its financial services, which is also a drawcard when recruiting members, as these services are provided at a lower cost.

“The relationship is robust but not necessarily easy because Numsa is radical and radical against capital, but we engage very hard to ensure we get recognition and support,” Msibi said. Source: Business Day