| Fri 20 Nov 2009, 17:39 | | MVG/MVGP - Mvelaphanda - Group Update on the Unbundling and Realisation |
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MVG MVGP
MVG
MVG/MVGP - Mvelaphanda - Group Update on the Unbundling and Realisation
Strategy
Mvelaphanda Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/004153/06
Ordinary share code: MVG
Preference share code: MVGP
Ordinary share: ISIN: ZAE000060737
Preference share: ISIN: ZAE000073540
("Mvela Group" or "the Company")
Update on the Unbundling and Realisation Strategy
Mvela Group is committed to the realisation and unbundling of the Company`s
assets and proposed distribution to shareholders, as announced at the Annual
Results presentation of the Company on 3 September 2009. This announcement
updates shareholders on the position.
1. Life Healthcare
Life Healthcare Group has appointed corporate advisors to advise the board
on strategic options with regards its shareholding. This follows
engagements with shareholders at the instance of Mvela Group which was
subsequently followed by an announcement by Mvela Group on 3 September 2009
of its intentions to realise or unbundle its 22% stake in Life Healthcare
Group to its shareholders. It is expected that the mandated advisors will
present their proposals to the board of the company early in 2010.
Life Healthcare is a black economic empowered (BEE) healthcare company. The
company remains committed to promoting the BEE codes of good practice and
continuing transformation in the private healthcare sector. The matter of
BEE ownership will be considered as part of the strategic review.
Life Healthcare is a key player in the South African healthcare sector. The
primary business is acute private hospital care. The company`s portfolio
comprises one of the widest geographic spreads of acute care hospitals and
same day surgical centres in southern Africa. The company currently owns
and operates 54 acute care facilities with over 7 600 beds. In addition Life
Healthcare owns Life Esidimeni the largest public private partnership in
South Africa with 14 facilities and over 5 000 beds.
The other shareholders in Life Healthcare include Brimstone Investment
Corporation, Rand Merchant Bank, Old Mutual Investment Group (SA), IDC,
doctors, staff and management.
It is the intention of Mvela Group to maximize value for shareholders by
looking at various options which might achieve its stated objective of
achieving, at minimum, its intrinsic net asset value as published in its
results on 3 September 2009.
2. Distribution to Shareholders
The Company is engaging with its funders relating to the process described
above and the board proposes to make a distribution to shareholders on
finalisation of the aforementioned process.
3. Other assets
The Company is engaged in various discussions relating to the realisation
of value in its other underlying assets. The Company will make appropriate
announcements to the Company`s shareholders when these discussions have
been concluded.
The focus of management is to first realise the unlisted investments which
represent about 70% of the value of Mvela Group as at 31 August 2009.
4. Management Company
Due to the complexity of establishing an appropriate management company
structure acceptable to all shareholders and to prevent any confusion that has
arisen, the Board of Mvela Group has resolved not to proceed with setting up a
management company. Aspects of the management company structure were becoming
increasingly complex as all eventualities could not be catered for, including
the calculation of the participation fee. While the information to
shareholders gave a broad range for the participation fee, considering the
hurdle set by the independent Board of Mvela Group, the likely range of
performance of the management company would have been between R40 million to
R45 million.
The following board and management changes will take effect from 1 January
2010:
* The board will be reduced from ten members to six members
* Mikki Xayiya will remain as the Executive Chairman
* Yolanda Cuba will remain as the Chief Executive Officer
* Ernst Roth will remain as the Financial Director
* David Moshapalo, Mpumi Mpofu, Ramesh Patel and Carl Stein will resign as
non-executive board members of the Company
* Bryan Hopkins is being appointed as the lead independent non-executive
director. The other independent non-executive directors are Oyama Mabandla
and Kuseni Dlamini.
Going forward, the Executive Chairman, Chief Executive Officer and Finance
Director will be responsible for managing the unbundling and realisation of
assets to unlock value for shareholders.
4. Convertible Preference shares
As at 20 November 2009, 437 732 preference shares have been converted into
ordinary shares. The total number of ordinary shares (net of treasury
shares) in issue is 407 707 689 and the total number of convertible
preference shares in issue is 54 262 268.
5. Treasury shares
All treasury shares have been cancelled as there is no intention for these
to be reissued due to the unbundling and realisation strategy. Application
will be made to JSE Limited for the termination of the listing of these
shares as soon as possible.
20 November 2009
Sponsor
Deutsche Securities SA (Pty) Limited
Date: 20/11/2009 17:39:01 Produced by the JSE SENS Department.
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