| Fri 21 Sep 2007, 15:27 | | MCU - m Cubed - Reinsurance Transaction Between M |
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MCU
MCU
MCU - m Cubed - Reinsurance Transaction Between M Cubed, M Cubed Life Limited
And Alternative Channel Limited And Results Of The Annual General Meeting
m Cubed Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/014568/06)
Share code: MCU ISIN: ZAE000033353
("m Cubed" or "the company")
REINSURANCE TRANSACTION BETWEEN m CUBED, m CUBED LIFE LIMITED AND ALTERNATIVE
CHANNEL LIMITED AND RESULTS OF THE ANNUAL GENERAL MEETING
1. INTRODUCTION
Shareholders are referred to the company`s announcement on SENS on 22 March
2007, and the further announcement on 7 May 2007 which sets out the details of
the reinsurance transaction between m Cubed, m Cubed Life Limited ("mCL") and
Alternative Channel Limited ("Alternative Channel").
2. RESOLUTIONS REQUIRED
2.1 The reinsurance transaction continuance is subject to the approval by the
majority of the votes of m Cubed shareholders (excluding related parties
and associates) being given by way of an ordinary resolution.
2.2 A general meeting of m Cubed shareholders will be held at 08h30 on Monday,
8 October 2007 in the boardroom on the 1st Floor, Ou Kollege, 35 Kerk
Street, Stellenbosch to consider and if deemed fit, approve, with or
without modification, the resolutions as the notice may contain.
3. ADJUSTED PRO FORMA FINANCIAL EFFECTS
Further to the announcement on SENS on 22 March 2007, the adjusted pro forma
financial effects taking into account the audited financial results for the year
ended 28 February 2007 and the actuarial valuation as at 1 March 2007 have been
disclosed below:
The pro forma financial effects of the transaction are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of m Cubed`s financial position nor of the effect on future earnings
after the transaction. Set out below are the unaudited pro forma financial
effects of the transaction, based on the audited consolidated financial results
of m Cubed for the year ended 28 February 2007. The directors of m Cubed are
responsible for the preparation of the unaudited pro forma financial
information.
Audited Pro forma Change(%)
Before after
reinsurance reinsurance
transaction(1) transaction
Earnings per 3,0 2,4 -20,0
share(2)
Headline earnings 3,3 2,6 -21,2
per share(3)
Net asset value per 43,3 43,5 0,5
share
Net tangible asset 42,9 43,1 0,5
value per share
Notes:
1. Extracted from the audited consolidated financial results of m Cubed for
the year ended 28 February 2007.
2. Based on a weighted average number of 738,285 million m Cubed shares in
issue during the year ended 28 February 2007 and on a net profit of R22,2
million for the year then ended.
3. Based on a weighted average number of 738,285 million m Cubed shares in
issue during the year ended 28 February 2007 and on a headline earnings of
R24,2 million for the year then ended.
4. The earnings and headline earnings per share figures in the "Pro Forma
after reinsurance transaction" column have been calculated on the basis
that the reinsurance transaction was effected on 1 March 2006.
5. The net asset value and the net tangible asset value per share figures in
the "Pro forma after reinsurance transaction" column have been calculated
on the basis that the reinsurance transaction was effected on 28 February
2007.
6. For purposes of preparing the pro forma financial information it has been
assumed that the Section 37 transfer in terms of the Long Term Insurance
Act (Act 52 of 1998) has already been effected.
7. An amount of R27,1 million is the residual cash balance to account for the
additional rand reserves paid over by m Cubed Life to Alternative Channel
that is included in the reinsurance premium. It has been assumed that the
premium rebate is R30,15 million to be paid by Alternative Channel to m
Cubed Life.
8. The additional rand reserve (included in the reinsurance premiums payable
by m Cubed Life to Alternative Channel in respect of the reinsured policies
in force at the effective date) and premium rebate are not taxable.
9. The premium rebate payable by Alternative Channel has been accounted for as
income in the year ended 28 February 2007. Similarly, the reinsurance
premium payable by m Cubed Life to Alternative Channel has been accounted
for as a cost in the year ended 28 February 2007.
10. It has been assumed that the costs incurred in the period 1 March 2006 to
28 February 2007 by m Cubed Life and m Cubed Management Services
(Proprietary) Limited were directly related to the m Cubed Life
policyholders` book and would have been reimbursed by Alternative Channel
in terms of the reinsurance agreement except for an amount of R 250 000 per
month.
4. CIRCULAR TO m CUBED SHAREHOLDERS
A circular to m Cubed shareholders containing details of the reinsurance
transaction and a notice of a general meeting, at which meeting the m Cubed
shareholders shall be asked to consider and approve the reinsurance transaction,
will be mailed to shareholders immediately.
5. RESULTS OF THE ANNUAL GENERAL MEETING
Shareholders are advised that the requisite majority of shareholders approved
all ordinary and special resolutions proposed at the annual general meeting held
today.
The special resolutions will be lodged with the Registrar of Companies for
registration in due course.
Stellenbosch
22 September 2007
Exchange Sponsors (Pty) Limited
Lead sponsor to the reinsurance transaction
PSG Capital (Pty) Limited
Joint sponsor and corporate adviser
Date: 21/09/2007 15:27:02 Produced by the JSE SENS Department.
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