Private equity investor Origo Sino-India has announced a follow-on investment, in conjunction with Origo Resource Partners, of an aggregate amount of USD5m in IGH.
Private equity investor Origo Sino-India has announced a follow-on investment, in conjunction with Origo Resource Partners, of an aggregate amount of USD5m in IGH.
The investment, which is initially in the form of new convertible loan stock to be issued by IGH, will be funded from the respective existing cash resources of OSI and ORP, and will be split on a 30:70 basis in accordance with their pro-rata shareholding in IGH.
The USD1.5m investment by OSI will effectively result in OSI’s equity interest in IGH increasing to a maximum of 19.2 per cent (assuming the loan stock is converted).
The investment will be used to fund IGH’s acquisition of IRCA and the proposed acquisition of a 45 per cent interest in IRCA Middle East. The acquisitions will assist IGH’s plans to become a global provider of health and safety, environmental and enterprise risk management services. The firm also aims to capture growth opportunities in the Asia Pacific, South American and Middle Eastern markets. Completion of the acquisitions is expected within the next month.
On completion of the acquisition of IRCA, the enlarged group will be renamed IRCA Holdings and have a presence in five continents. In 2008 the enlarged group achieved revenues of USD19m on a pro forma basis, and the directors of IRCA expect the enlarged group to experience revenue growth in the 2009 financial year.
The enlarged group will benefit from a blue chip client base that includes customers such as Anglo American, ArcelorMittal, Vale, Sasol, Eskom, BHP Billiton, Unilever, BP, Volkswagen, SA Breweries, Lafarge and China Power Group.
Chris Rynning, chief executive officer of OSI, says: ‘I am delighted that Origo has been able to play such an important role in the development of IGH. This transaction provides IGH with significant growth opportunities and underlines how our strategy of investing and working with promising companies, in our chosen sectors, can deliver value to shareholders.’
Carel Labuschagne, chief executive of IRCA, says: ‘The leading operating and technical expertise developed to serve South African mining and industry over many years provides us with a significant competitive advantage in an increasingly globalised market place for operational, health and safety and environmental risk management services.
‘I am convinced that the combination of IRCA’s significant intellectual capital with IGH and Origo’s presence in China will enable us to capture opportunities in this rapidly growing market. I and the rest of my team are delighted to be working with Origo, given their track record of supporting and working with the companies in which they invest.’
