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UPDATE 1-South Africa's Investec, Nedbank exposed to troubled building firm
July 25, 2013 / 2:02 PM / 4 years ago

UPDATE 1-South Africa's Investec, Nedbank exposed to troubled building firm

JOHANNESBURG, July 25 (Reuters) - South Africa's Investec , Nedbank and Sanlam said on Thursday they had exposure to a failing building supply company First Strut, whose chairman was shot dead in June.

Trade in First Strut's 925 million rand ($95 million) worth of bonds was suspended last week following an application to place the firm in liquidation, according to a stock exchange filing.

Its chairman, Jeff Wiggill, was found dead with a bullet wound to his head next to a luxury Bentley automobile in the early hours of June 20 in the Soweto township that borders Johannesburg. His wallet and cell phone were missing.

No arrests have yet been made, a police official said.

Investec spokeswoman Ursula Nobrega said the bank had lent First Strut 240 million rand.

The loan was "fully secured on underlying collateral, which is predominantly property," she said.

Its asset management arm had exposure to First Strut's bonds, she said, without giving further details.

Lender Nedbank and insurer Sanlam also confirmed exposure to First Strut, but declined to give further details.

First Strut, which does business under the name First Tech, earlier this month applied for business rescue, saying its financial position worsened following the murder of its chairman.

"The tragic demise of Mr Wiggill has placed not only the company in a dire and invidious position but also the group as a whole," First Strut said in the July 5 filing for business rescue.

"Since the demise of Mr Wiggill it has become necessary to unravel a number of complex and intricate financial transactions," it said, adding existing cash flow and funding would not be sufficient.

The bonds were arranged by First Rand unit Rand Merchant Bank and due to mature in 2016.

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