| Fri 22 Aug 2008, 15:30 | | SBV / SVN - Sabvest Limited - Resolution Of Disputes |
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SBV SVN
SBV
SBV / SVN - Sabvest Limited - Resolution Of Disputes
SABVEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1987/003753/06)
Ordinary shares: Share code: SBV & ISIN: ZAE000006417
N Ordinary shares: Share code: SVN & ISIN: ZAE000012043
("Sabvest" or "Sabvest Group")
RESOLUTION OF DISPUTES
Shareholders are advised that Sabvest Finance and Guarantee Corporation Limited
(SFGC), a subsidiary of Sabvest Limited (Sabvest), has settled all of its
disputes and legal actions with the Receivers for creditors of New Republic Bank
Limited (NRB) and the liquidators of NRB Holdings Limited (NRBH).
These arose from the sale in 1993 by Merhold Limited (then a listed subsidiary
of Sabvest) of its interests in Merchant Trade Finance Limited (MTF) to NRBH,
debtor guarantees given by SFGC to NRBH and MTF, the sale in 1996 of Merhold`s
interests in NRBH and Merhold`s representation on the NRBH board. SFGC and
Merhold made guarantee, final settlement and other payments of R136m to NRBH and
MTF in 1993 - 1997 in terms of the agreements between the parties. However,
pursuant to NRB being placed in receivership in 1999 and MTF and NRBH being
placed in liquidation in 2000 and 2002, various disputes and actions arose
between the NRB Receivers, the NRBH Liquidators, the MTF Liquidators and SFGC
(and its CEO, who had represented Merhold on the board of NRBH).
Although SFGC and its advisors are of the view that the legal defenses of the
Sabvest group (and its CEO) are sound, SFGC has taken steps to procure an early
resolution to these actions. This is desirable due to the high costs of these
actions, the considerable executive time being expended, the years still likely
to pass before these actions are settled by the courts and the perceived
uncertainty of outcomes which has prejudiced corporate opportunities available
to the Group.
SFGC was successful in the first of the court actions in March 2008 and this
improved the climate for a comprehensive settlement.
In terms of the settlement now agreed by the parties, SFGC will:
- take cession of overdue MTF debtors having a face value of R33,8m for its
own potential benefit;
- pay R28,5m in full and final settlement of all claims, potential claims and
legal actions by NRBH, NRB and MTF against the Sabvest Group and its CEO
(without any admissions of any sort and without in any way conceding that
the contentions of the Group or its CEO in any of the matters are
incorrect);
- pay R2,4m to the MTF liquidators in lieu of their expected fees on MTF
claims against NRB which are disputed by the NRB Receivers;
- withdraw SFGC`s own actions and objections against NRB.
Each party will pay its own costs.
SFGC will fund this amount of R30,9m from Sabvest`s own resources. The full
amount (less any recoveries from the MTF debtors) will be expensed by Sabvest in
the current financial year. This will have the effect of reducing earnings per
share ("EPS") for the year but will have no effect on headline earnings per
share or expected dividends per share. A trading statement will be issued once
the effect on EPS can be reliably estimated.
Sandton
22 August 2008
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 22/08/2008 15:30:42 Produced by the JSE SENS Department.
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