| Thu 20 Dec 2007, 14:19 | | GMB - Glenrand M I B Limited - Disposal of a portion of the business of Glenrand |
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GMB - Glenrand M I B Limited - Disposal of a portion of the business of Glenrand
M I B Benefit Services (Proprietary) Limited and renewal of cautionary
announcement
GLENRAND M I B LIMITED
(A Licensed Financial Services Provider)
(Incorporated in the Republic of South Africa)
(Registration number 1997/008001/06)
Share code: GMB ISIN: ZAE000078010
("Glenrand M I B" or "the Company")
DISPOSAL OF A PORTION OF THE BUSINESS OF GLENRAND M I B BENEFIT SERVICES
(PROPRIETARY) LIMITED AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Glenrand M I B shareholders are referred to the announcement issued by the
Company and published on the Securities Exchange News Service ("SENS") on
Thursday, 1 November 2007, in which the Company announced its intention to
dispose of the business of Glenrand M I B Benefit Services (Pty) Limited
("Benefit Services"). Shareholders are accordingly advised that an Agreement
dated 19 December 2007 has been concluded ("the Agreement") with ABSA
Consultants and Actuaries (Pty) Limited ("ABSA") relative to the transfer of the
retirement fund administration mandates onto their license in terms of the
Pension Funds Act ("the S13B license"). The effective date of the Agreement will
be two business days after the fulfilment of the suspensive conditions referred
to in paragraph 7 below ("the Effective Date").
2. CONSIDERATION
The consideration will be an amount equal to 80% (eighty percent) of the
aggregate annualised revenues (which includes administration and consulting
fees, as well as commissions) ("the Consideration"), in respect of client
mandates that transfer and remain with Absa on the expiry of 12 months from the
Effective Date, provided that the Consideration (to be settled in cash) will not
exceed R30 000 000 (thirty million Rand).
Until such time as the client mandates are transferred, ABSA will, against
payment of service fees by Benefit Services to ABSA, act as the agent of Benefit
Services and perform according to the service level agreement forming part of
and set out in the client mandates.
3. INDEMNIFIED CLAIMS
In terms of the Agreement, Benefit Services will indemnify and hold ABSA
harmless against all claims, including professional indemnity claims, against
Benefit Services arising from or in connection with Benefit Services` (or any of
its agents) administration of the S13B book of business or its rendering of S13B
and related services prior to the Effective Date ("the Indemnified Claims"). The
parties will manage the Indemnified Claims according to a management protocol,
which is to be developed and finalised.
4. TERMINATED FUNDS
During the past calendar year, a significant number of clients have terminated
their mandates with Benefit Services, for which provision has been raised
("Terminated Funds"). However, further mandates are under notice of renewal and
additional client resignations are expected to materialise, which will reduce
the number of clients ultimately transferring to ABSA. As an indivisible part
of the Agreement, ABSA has been appointed to manage and administer the
Terminated Funds subsequent to the Effective Date. All costs associated with
finalising the Terminated Funds will be for the account of Benefit Services.
The parties will manage the Terminated Funds according to a management protocol,
which is to be developed and finalised.
5. EMPLOYEES
Section 197 of the Labour Relations Act applies to the transactions contemplated
in the Agreement and therefore employees of Benefit Services will be transferred
on terms on the whole no less favourable than those that they currently enjoy
("the Transferring Employees").
However, due to the uncertainty of the number of mandates that may eventually
transfer to ABSA, the latter may be required to lawfully terminate the
employment of some of the Transferring Employees. Benefit Services has
undertaken to bear the retrenchment costs relative to the Transferring Employees
if they are retrenched within a 12 month period from the effective date. Since
the Terminated Funds may not be resolved within a 12 month period, Benefit
Services has also agreed to extend the undertaking for those Transferring
Employees working exclusively on the Terminated Funds, until such time as they
are transferred or resolved.
6. RESOLUTIVE CONDITIONS
The Agreement is further subject to the resolutive condition that by no later
than 31 January 2008 Benefit Services and ABSA will have finally settled the
terms and conditions of the Indemnified Claims and Terminated Fund management
protocols as referred to above.
7. SUSPENSIVE CONDITIONS
The Agreement is subject, inter alia, to (i) the written approval of any
regulatory authority having jurisdiction over Benefit Services and ABSA
(including the Competition Commission and Financial Services Board ("FSB")) to
the extent required; and (ii) the Company standing surety for all the
obligations of Benefit Services to ABSA in terms of the Agreement. All the
suspensive conditions have to be fulfilled or waived by no later than 31 January
2008, however, Benefit Services and ABSA may agree to extend the date for
fulfilment of any outstanding suspensive conditions beyond 31 January 2008.
8. TEN-50-SIX LIFE LIMITED ("TEN-50-SIX")
It was previously announced that Ten-50-Six intends transferring its assets to
another FSB approved Life Company, through Advantage Asset Managers
(Proprietary) Limited ("Advantage")("the transfer"). Investment Administration
and Portfolio Management services continue to be provided to Ten-50-Six by
Advantage, and Ten-50-Six and Advantage are in the process of negotiating the
transfer. It is intended that an announcement setting out further information
regarding the transfer will be made on or about 31 January 2008.
9. INTEREST IN OTHER ASSETS OF BENEFIT SERVICES
Benefit Services has received and accepted a non-binding indicative offer from
ABSA for its Healthcare business and ABSA will be performing the required due
diligence during January 2008. The intention is to conclude a definitive
agreement on or about 31 January 2008. None of the Risk Services business units
are affected by these discussions and the Company is continuing with its growth
strategy for the continuing business, which constitutes the core component of
the Company.
10. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to the above, Glenrand M I B shareholders are advised to continue to
exercise caution when dealing in the Company`s securities until a further
announcement is made.
Randburg
20 December 2007
Investment Bank and Sponsor
Nedbank Capital
Date: 20/12/2007 14:19:01 Produced by the JSE SENS Department.
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