INTEREST CHARGE
Sanlam's strings-attached investment costs AfroCentric
Sanlam’s investment in AfroCentric Investment Corporation has cost the investment holding company dearly — it posted a 4.86% decline in headline earnings for the interim period to end-December. The insurer’s R703m subscription for 28.7% of ACT Healthcare Assets, AfroCentric’s wholly owned subsidiary that, in turn, holds the group’s operating assets such as the Medscheme health administrator, had strings attached including a requirement that AfroCentric achieve a certain level of profits for the year to June 2017. If AfroCentric failed to reach the profit target, Sanlam had the right to give back its stake to AfroCentric at cost plus interest. This "put option" resulted in R23m conditional interest for the group during the period. AfroCentric had not responded to requests for comment by the time of publication.
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