| Mon 9 Feb 2009, 8:35 | | PSG - PSG Group - Announcement Relating To The Disposal Of 34.6% Interest In |
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PSG
PSG
PSG - PSG Group - Announcement Relating To The Disposal Of 34.6% Interest In
Channel Life Limited
PSG GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1970/008484/06
JSE share code: PSG & ISIN: ZAE000013017
("PSG Group")
ANNOUNCEMENT RELATING TO THE DISPOSAL OF 34.6% INTEREST IN CHANNEL LIFE LIMITED
1. INTRODUCTION
Shareholders are advised that in terms of an agreement concluded between
PSG Group ("the seller") and Sanlam Life Insurance Limited ("Sanlam Life"),
Sanlam Life will acquire the balance of PSG Group`s investment in Channel
Life Limited ("Channel Life"), being 34.6% in Channel Life.
2. DETAILS OF CHANNEL LIFE
Channel Life is a niche life insurance company that provides life assurance
products to retail clients.
3. RATIONALE FOR THE TRANSACTION
Channel Life has grown its business over the past few years, with the
assistance of Sanlam Life as the controlling shareholder. To this extent,
with the relationship having proved to be mutually beneficial, Sanlam Life
now wishes to incorporate Channel Life as part of its larger stable.
4. PARTICULARS OF THE DISPOSAL
4.1 Subject matter of the disposal
The seller has disposed of 110.5 million Channel Life shares to Sanlam
Life.
4.2 Disposal consideration
The seller has disposed of its interest in Channel Life to Sanlam Life for
a total consideration of R131.6 million, equal to the embedded value of
Channel Life, and repayment to PSG Group of shareholders` loans in the
order of R65.5 million. This represents a price of R1.19 per share, subject
to the final statutory audit as at 31 December 2008, and implies a value of
approximately R382 million for Channel Life.
The full purchase consideration will be paid in cash by Sanlam Life on the
third business day following the fulfilment of the suspensive condition.
4.3 Effective date
The effective date of the transaction is 1 January 2009.
4.4 Suspensive condition
This transaction is subject to approval by the necessary regulatory
authorities, including the Registrar of Insurance, as a suspensive
condition, which suspensive condition may be varied or waived by the
parties in writing.
4.5 Application of transaction proceeds
PSG Group will apply the proceeds to finance further investment activities.
5. FINANCIAL EFFECTS
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 PSG Group`s financial positions 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 unaudited consolidated financial results of PSG
Group for the six months ended 31 August 2008. The directors are
responsible for the preparation of these pro forma financial effects.
Unaudited Pro forma Change
Before the After the (%)
transaction Transaction
(cents) (cents)
Earnings per share 30.3 34.8 14.9
Headline earnings per 29.6 34.6 16.9
share
Net asset value per 1 681.3 1 683.0 0.1
share
Net tangible asset 1 239.8 1 241.5 0.1
value per share
1. The earnings and headline earnings per share figures in the "Pro forma
After the transaction" column have been calculated:
- on the basis that the transaction was effected on 1 March 2008;
and
- the net proceeds would have earned interest at an after tax
interest rate of 7.92%.
2. The increase in earnings and headline earnings per share when
calculating the pro forma financial effects is the result of Channel
Life`s equity accounted loss for the six months ended 31 August 2008
included in the "Unaudited Before the transaction" column having been
replaced by after tax interest income (i.e. a profit) in the "Pro
forma After the transaction" column.
3. The net asset value and net tangible asset value per share figures in
the "Pro forma After the transaction" column have been calculated on
the basis that the transaction was effected on 31 August 2008.
Stellenbosch
9 February 2009
PSG Capital (Pty) Limited
Sponsor to PSG Group
Date: 09/02/2009 08:35:41 Produced by the JSE SENS Department.
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