THE South African investment firm founded and run by Rangers chairman Dave King has struck a deal to sell off most of its financial services wing to a broker to Wall Street's biggest banks, it has emerged.
GFI Group, the New York-based brokerage firm founded by British-born multi-millionaire banker Michael Gooch, has confirmed the deal to capture Micromega Securities - an electronic interdealer broker in the wholesale and retail financial markets.
The move would see the parent company Micromega Holdings, of which Mr King is executive chairman, retain remaining interests, including the provision of occupation health, safety and environmental risk management services. It will also retain its IT solutions wing which supplies smart water meters and electronic water-control devices.
While the value of the deal is undisclosed, analysts estimate the deal will run in to millions.
"We recognize the opportunity to increase GFI's footprint in the South African and the wider African marketplace by formally bringing Micromega Securities and its talented team into GFI," said Colin Heffron, CEO of GFI Group.
GFI and Johannesburg-based Micromega Securities have been involved in a joint partnership in electronic trading for the past three years.
British-born Mr. Gooch, who learned the interdealer brokerage business in London, launched GFI in 1987 with two partners and just $300,000. In 2013, he stepped down as CEO while remaining executive chairman.
The development has come after Micromega Holdings posted unaudited half yearly profits of £6.25m up from £4.6m in 2015.
Micromega Securities operates interdealer brokerage services in fixed income, rates and foreign exchange products through three subsdiaries that make up the vast bulk of the parent company's financial services division.
The board said that while the financial services businesses were a "relatively small contributor" to group profits, they performed exceptionally well with a growth in profitability of a little over 100 percent.
Directors said this was mainly as a result of the financial market volatility caused by international concerns around the global economy, Brexit and the USA elections.
The financial services division made an annual profit of around £480,000 according to its last audited accounts for the year to March, 2016.
Mr. Gooch who learned the interdealer brokerage business in London, launched GFI in 1987 with two partners and just $300,000. In 2013, he stepped down as CEO while remaining executive chairman.
A Micromega source said the transaction did not require any disclosure in terms of the Johannesburg Stock Exchange listing requirements as it is categorised as a "small transaction".
Mr King's Rangers' latest annual losses cut by more than half from £7.7 million in the year to June 30, 2015 to £3.3 million.
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