EMPOWERMENT group Brimstone Investment Corporation will retain a bigger stake in newly listed Life Healthcare Group Holdings than originally envisaged. Brimstone announced it would unbundle 9.4% of its remaining 15.6% stake in Life to shareholders and retain a stake of 6.2% in the business. Brimstone initially held a 21.5% stake in Life, but sold off a 5.9% stake to facilitate the listing of the business. Earlier indications were that Brimstone would want to retain a stake of only 2.98% stake in Life. But demand for Life shares ahead of its listing was not as strong as anticipated, which meant slightly subdued placement prices. The value of Brimstone's retained stake in Life is worth close to R900m, while the unbundled stake is worth over R1.5bn. Brimstone indicated that the unbundling would take place via Health Strategic Investments Limited (Health), which would be listed on the JSE as an asset back security in mid-August this year. Health will house both Brimstone and Mvelaphanda Group's unbundled assets. The only asset of Health at the time of listing would be a 26.6% direct holding in Life. The unbundling proposal would see Brimstone shareholders receiving 40 Health shares for every 100 Brimstone shares held. Brimstone CEO Mustaq Brey said the unbundling would result in the company's shareholders having a clear see-through interest in Life Healthcare. He said it would allow them to trade their interest in the company separately to their Brimstone shares, adding that the unbundling could therefore potentially unlock significant value for shareholders. There is, however, a six month lock in period that forms part of an earlier agreement with Life. At the end of the lock-up period, the Life shares held by Health would be unbundled to Health shareholders. Mvelaphanda Group also announced its plans for the unbundling of its remaining shareholding in Life Healthcare. The Mvela Group would hold about 17.4% of Life Healthcare. The company will unbundle about 14.2% to Health, while remaining 3.2% will be held back for the benefit of the company's preference shareholders. The preference shareholders provided the R380m capital that was used by Mvela to acquire its Life Healthcare interest.

Marc Hasenfuss: Fin24.com, 23 June 2010