Brait, the investment company that holds large shareholdings in Virgin Active, Premier and New Look in the UK, will pay its new investment advisory firm The Rohatyn Group (TRG) less as it continues to plan for the exit of its remaining investments
The company’s investment advisor is Rohatyn Management South Africa, a specialised global asset management firm focused on emerging markets and real assets. TRG is a new advisor to Brait because as at April 1, 2023, Brait’s former advisor Ethos, the largest private equity firm in Southern Africa, merged with TRG.
In order to align the interests of shareholders and the investment advisor in delivering Brait’s strategy of monetising its remaining assets, Brait said the R50 million advisory fee that had been approved for the 2025 financial year, would apply annually, subject to a three-month notice period, or until such a time as the remaining investments were realised or unbundled to shareholders. Last year’s fee was R65m.
After that, to conclude a winding-up, a revised service fee of R1.5m per month would apply.
TRG, based in New York, employs about 160 professionals in 17 countries across North and South America, Europe, the Middle East, Africa, India, South East Asia and Oceania. The majority of the firm is indirectly owned by its partners.
In the past year to March 31, Brait’s key reporting metric of net asset value per share came to R6.52, an 8% decrease on the figure in 2023. Available cash and facilities were R1.5 billion at the end of the 2024 financial year.
The company’s assets were valued at R15.18bn at year end, while it still owes some R6.3bn on two bond issues. Since February 2020, when Brait changed its strategy to monetise its assets and optimise the return of capital to shareholders, Brait has realised disposal proceeds of R9.1bn, which has mostly been applied to repaying debt.
On June 3, Brait announced a successful recapitalisation, which it had required because of the December 2024 maturity of its bonds, and because the exiting of its investments took longer than expected due to a number of factors including the Covid pandemic,
The recapitalisation terms involved the three-year extension of the maturities of the bonds to December 2027, combined with a partial R900m repayment funded from the placement of 15 million Premier shares in March 2024.
The recapitalisation also included a fully-underwritten rights offer of R1.5bn, to be offered at R0.59 per Brait share, for which shareholders would vote at the shareholder meeting this month. Brait’s share price closed at R1.08 per share on Friday.
Brait said the proceeds from the recapitalisation would be used for general working capital purposes, potential investment in existing portfolio companies and repayment of group debt over time.
“The recapitalisation meaningfully reduces the group’s debt and strengthens the Brait balance sheet, which should provide runway for all stakeholders to benefit from the continued recovery in Virgin Active and New Look and the growth in Premier, and gives Brait the ability to choose the earliest optimal exit window for each asset, providing increased flexibility to redeem the bonds, which may allow for the return of capital to stakeholders in the event of an earlier exit of the asset base,” Brait’s directors said.
Virgin Active, the international gym group that makes up 67% of Brait’s investment portfolio and which might be listed, reported a strong performance and operational turnaround in the past year after it was badly affected by closures during the pandemic – and all territories were now EBITDA (earnings before interest tax depreciation and amortisation) positive.
Brait’s unrealised carrying value for Virgin Active at March 31 was R10,18bn,versus R9.05bn in the period before that.
BUSINESS REPORT