| Fri 10 Jul 2009, 15:10 | | SPG - Super Group - Announcement Regarding The Proposed Sale By Super Group Of |
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SPG
SPG
SPG - Super Group - Announcement Regarding The Proposed Sale By Super Group Of
Emerald Insurance Company And Further Cautionary Announcement
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1943/016107/06)
Share code: SPG
ISIN code: ZAE000011334
("Super Group")
ANNOUNCEMENT REGARDING THE PROPOSED SALE BY SUPER GROUP OF EMERALD INSURANCE
COMPANY AND FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are advised that Super Group and Santam Limited ("Santam") have
reached agreement in terms of which Santam will acquire the entire issued
ordinary share capital of Emerald Insurance Company Limited ("Emerald"), a
wholly-owned subsidiary of Super Group ("the Transaction").
The Transaction will become effective on the last day of the month subsequent to
the fulfilment or waiver of the conditions precedent set out in paragraph 2.4
below ("the Effective Date").
2. Particulars of the Transaction
2.1 Nature of Emerald`s business
Emerald`s primary activities are writing third party commercial property and
engineering insurance, cell captive management and third party insurance
administration. Emerald is recognised as one of South Africa`s leading
underwriters in property and engineering insurance.
2.2 Rationale for the Transaction
The board of directors of Super Group ("the Board") has resolved to consider the
Transaction mainly as a consequence of:
- the decision by the Board to implement a refocused strategy
that may lead to the disposal of certain non-core assets; and
- the announcement of a recapitalisation and debt restructure
for Super Group (as released on SENS on 18 March 2009).
2.3 Terms of the Transaction
The total purchase consideration is an amount equivalent to the tangible net
asset value ("TNAV") of Emerald as at the Effective Date. The TNAV of Emerald
will be determined with reference to the unconsolidated audited financial
statements of Emerald as at the Effective Date, with an adjustment to account
for the difference between the carrying value and the fair value of Emerald`s
38% shareholding in Emerald Risk Transfer (Proprietary) Limited ("ERT") and the
carrying value of non-core assets.
The purchase consideration will be increased by a portion of the profits on the
release of excess reserves as at the Effective Date, if any. This profit shall
comprise the excess technical reserves of Emerald after the deduction of
reasonable costs and capital charges, but specifically excluding investment
returns and is payable in cash annually over a period up to December 2013.
60% of the provisionally calculated purchase consideration will be settled in
cash on the Effective Date with the remaining 40% payable after final
determination of the TNAV of Emerald as at the Effective Date. 10% of the
purchase consideration will be held in escrow as security for the fulfilment of
all of Super Group`s obligations under the Transaction.
The sale proceeds of the Transaction will be utilised to settle a portion of
Super Group`s short-term debt.
2.4 Conditions precedent
The Transaction is subject to, inter alia, the fulfilment or waiver of the
following conditions precedent by 30 September 2009:
- a sale agreement being executed between Super Group, Emerald
and Santam;
- a sale agreement being executed between ERT, the shareholders
of ERT and Santam;
- approval by the Competition Commission;
- approval of the Transaction by Super Group shareholders in
general meeting;
- approval of the Transaction by the Registrar of Short-term
Insurance in terms of the Short-term Insurance Act, Act No. 53
of 1998; and
- the obtaining of the necessary approvals, including those from
JSE Limited ("the JSE") and the Securities Regulation Panel,
to the extent required.
3. Pro forma financial effects, forecast information and specific information
relating to the Transaction
Once the majority of the conditions are met and the pro forma financial effects
of the Transaction can be determined, the appropriate announcement will be made
by Super Group.
4. Transaction categorisation and circulars to Super Group shareholders
The Transaction is a Category 1 transaction for Super Group in terms of the JSE
Listings Requirements. A circular providing information on the Transaction and a
notice convening a general meeting of Super Group shareholders to approve the
Transaction, will be posted to Super Group shareholders in due course.
5. Further cautionary announcement
Further to the cautionary announcements dated 18 March 2009 and 28 May 2009,
shareholders are advised that the proposed restructure and rights offer; and the
negotiations with regard to the potential disposal of the Autozone and Mica
businesses are still in progress which, if successfully concluded, may have a
material effect on the price of Super Group`s securities.
Accordingly, shareholders are advised to continue exercising caution when
dealing in Super Group`s securities until a full announcement is made.
Shareholders are also advised to continue exercising caution until the detailed
financial effects of the Transaction are known.
10 July 2009
Sandton
Financial advisor and Sponsor to Super Group
Deutsche Securities (SA) (Proprietary) Limited
Date: 10/07/2009 15:10:02 Produced by the JSE SENS Department.
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