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Investec, Nedbanak exposed to troubled building firm

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JOHANNESBURG — South African firms Investec, Nedbank and Sanlam said yesterday they had exposure to troubled construction company First Strut, which has 925 million rand ($95 million) worth of corporate debt.

Reuters

First Strut’s holding company was placed in provisional liquidation last week, raising the possibility of a potential default on the bonds, Business Day newspaper reported yesterday.

The co-founder and chairman of First Strut’s holding company, First Tech, was found dead next to his Bentley in the early hours of June 20, the newspaper said.

Officials for insurer Sanlam, lenders Nedbank and Investec confirmed to Reuters they had bought some of the 2016 bonds from First Stut.

All three firms declined to give the size of their exposure.

Investec spokeswoman Ursula Nobrega said its exposure to the bonds was though its asset management arm.

In addition, Investec’s banking arm has lent R240 million to First Strut, she said.

That loan was “fully secured on underlying collateral, which is predominantly property,” she said.

The bonds, arranged by First Rand unit Rand Merchant Bank and issued in 2011, have since been suspended from trading on the Johannesburg Stock Exchange.

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