South Africa
When the MultiChoice Group unbundled from Naspers, a broadbased multinational internet and media group headquartered in South Africa, it listed separately on the Johannesburg Stock Exchange at the end of February 2019. Its listing was achieved in a very short period. Going hand-in-hand with this was the development of its treasury process. It effectively started with the treasury process in the last week of November 2018, concluding at the end of March 2019.
The project encompassed a number of demanding processes, involving six international banks and four South African banks. Despite the complexity and workload, it effectively concluded within three months. It involved the following:
The team transferred close to 1,000 forward foreign exchange contracts (FECs) to the new treasury entity and required multiple novation, cession and delegation, and nomination deed assignment agreements. This was due to ISDA agreements falling within South African law for certain banks, and UK law for others.
The treasury systems previously shared with the Naspers treasury team also needed to be separated.
Given the extent of the treasury process and the amount of time available to complete it in, it took a very structured and diligent effort from the entire team to get this across the line.
Significant effort was spent on the initial credit presentations to ensure that bank credit teams were provided with all relevant information to obtain approvals for facility requests within two weeks of submission.
Multiple streams had to achieve daily traction and involved collaboration with internal business partners, group internal legal counsel as well as external legal service providers. Dealing with South African and international banks also resulted in a multitude of different on-boarding requirements and negotiations to align the guarantee structure and conclude on the ISDA agreements. Due to the complex nature of the funding and FX facilities for the group, it was critical to the success of the overall listing project.
Another significant element was separating and setting up a new database on the previously shared treasury management system (TMS). This had to be tested and implemented before unbundling, to ensure all related treasury activities, including MultiChoice’s hedging programme and cashpool management, could continue without any delays.