Old Mutual to Sell Shares in $1.6 Billion Property-Investment Fund in 2011

Old Mutual Plc, Africa’s biggest insurer, aims to raise 5 billion rand ($684 million) by selling shares in its Triangle Core Real Estate Fund, making it the second-biggest offering in South Africa in at least five years.

The company plans to sell stock in the property fund with assets worth 12 billion rand and list the shares on Johannesburg’s stock exchange in mid-2011, Old Mutual said in a statement handed to reporters in the city today. The fund’s assets include the Menlyn shopping mall in Pretoria, Cavendish Square in Cape Town and Gateway in Durban.

The offering may prove to be the largest in South Africa after Life Healthcare Group Holdings Ltd. in June, which was also the continent’s fifth-biggest in at least nine years. The property fund will be the third-largest on the JSE after Growthpoint Properties Ltd. and Redefine Properties Ltd., Old Mutual said.

Old Mutual wants the fund to be “the biggest by 2015, with 100 billion rand in assets under management,” Ben Kodisang, managing director of Old Mutual Investment Group Investments, known as Omigpi, said in Johannesburg today. The company hasn’t chosen a sponsor for the offering, he said. Nedbank Capital did the primary research, Kodisang said.

Dividend Yield

Omigpi is one of fifteen units owned by Old Mutual’s South African investment business. The company has as much as 25 billion rand in assets under management, according to its website.

Old Mutual, which is based in London, is in talks to sell its controlling stake in its Nedbank Group Ltd. lending unit to HSBC Holdings Plc and is selling its U.S. life insurance company to Harbinger Capital Partners for $350 million. Old Mutual, which needs to repay 1.5 billion pounds ($2.3 billion) of debt by 2012, has changed management and sold assets after the global financial crisis caused write downs that caused it to make a loss in 2009.

Triangle Core Real Estate Fund’s forward, or estimated, dividend yield is projected at 7.7 percent.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

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