| Thu 7 Oct 2010, 12:53 | | MVG/MVGP - Mvelaphanda Group Limited - Company announcement and withdrawal of |
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MVG MVGP
MVG
MVG/MVGP - Mvelaphanda Group Limited - Company announcement and withdrawal of
cautionary announcement
Mvelaphanda Group Limited
Registration Number: 1995/004153/06
(Incorporated in the Republic of South Africa)
Ordinary share code: MVG
ISIN: ZAE000060737
Preference share code: MVGP
ISIN: ZAE000073540
("Mvela Group" or "the Group")
CONFIRMED INTENTION TO LIST MVELASERVE ON THE JSE MAIN BOARD
UNBUNDLING OF MVELA GROUP SHARES IN MVELASERVE TO MVELA GROUP ORDINARY
SHAREHOLDERS
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Mvela Group ordinary and preference shareholders ("Mvela Group shareholders")
are referred to the cautionary announcement contained in the reviewed year end
results of Mvela Group for the financial year ended 30 June 2010 released on
SENS on 26 August 2010. This cautionary announcement stated that the Mvela
Group board of directors ("Board") was in the process of assessing both the
qualitative and quantitative aspects of the alternatives available regarding
Mvela Group`s investment in Mvelaserve Limited ("Mvelaserve" or "the
Company"), and that they were considering a separate listing of the shares in
Mvelaserve on the exchange operated by the JSE Limited ("JSE") ("the
Mvelaserve Listing") and the unbundling of Mvela Group`s shares in Mvelaserve
to Mvela Group ordinary shareholders ("the Unbundling").
The Board has now completed its assessment of the strategic options for
Mvelaserve and is pleased to confirm its intention to proceed with the
Mvelaserve Listing and the Unbundling, which are subject to JSE approval. The
Board is of the view that the proposed Mvelaserve Listing and the Unbundling
would best serve the interests of Mvela Group shareholders and will be the
most efficient manner to unlock value for the Mvela Group shareholders.
The proposed Mvelaserve Listing and Unbundling follows the announcement made
by Mvela Group CEO, Yolanda Cuba, last year of its commitment to unlock value
for Mvela Group shareholders through the realisation and unbundling of the
Group`s assets. This proposed Mvelaserve Listing and Unbundling follows the
unbundling of Mvela Group`s interest in Life Healthcare Group Holdings Limited
("Life Healthcare") and the listing of Life Healthcare on the JSE on 1 June
2010.
Mikki Xayiya, Executive Chairman of Mvela Group, said:
"This is another major step forward in our stated strategy to unlock value for
shareholders through the unbundling and realisation of the Group`s assets.
Mvelaserve is a strong business with leading market positions, an impressive
track record, strong financial performance and an experienced and
entrepreneurial management team. It is well disposed to stand alone as a
listed entity."
Mvelaserve`s results for the year to 30 June 2010 showed revenues up 12% to
R4.2bn and earnings before interest, tax, depreciation and amortisation up 31%
to R465m. The Company has a balanced earnings profile through its various
areas of operation with clients from both the private and government sectors.
Mvelaserve is a leading provider of integrated outsourced business support
services in South Africa employing about 30,000 people. The Company provides
a wide range of services in the areas of facilities management, security,
catering and cleaning and also in the gambling, franchising and freight
markets.
TFMC, the integrated facilities management business, is the largest in South
Africa. TFMC provides total integrated facilities management services,
including corporate real estate management and professional engineering
services which allow clients to focus on their core business.
Protea Coin, the security business, is a leading provider of integrated risk
reduction solutions with three primary divisions being assets-in-transit,
guarding and technical providing high-tech security solutions.
Royalserve houses the catering and cleaning businesses. Royalserve Catering
is an outsourced food solutions company and Royalserve Cleaning is the third
largest cleaning company in South Africa with clients across many sectors.
Other Mvelaserve businesses comprise Khuseti, the franchisor of the King Pie
brand, Zonke, the sole provider of the Central Electronic Monitoring System
for the limited payout gambling machines and Contract Forwarding, an
international freight forwarding and customs broker.
Jorge Ferreira, Group CEO of Mvelaserve, said:
"Mvelaserve`s strategy is to continue building its business as the recognised
leading provider of outsourced support services in South Africa and the rest
of the continent. We believe this will be achieved through our well
established and recognised brands, strong portfolio of blue chip clients and
leading positions in attractive markets. The separate listing of Mvelaserve
will bring benefits from an enhanced public profile and provide the Company
with a further source of capital to facilitate future expansion if required."
Mvelaserve will issue a pre-listing statement and Mvela Group will issue a
circular to shareholders in which more information will be provided in respect
of the proposed unbundling and listing. It is expected that the listing of
Mvelaserve will take place before the year end. There is no intention to
raise fresh capital at the listing as the Company is well capitalised for its
current requirements and has strong cash flows. The listing will be subject
to various conditions including the passing of resolutions required to approve
the unbundling by Mvela Group shareholders at a general meeting of the Group.
Mvela Group shareholders are advised that it is no longer necessary to
exercise caution when dealing in Mvela Group securities.
7 October 2010
Johannesburg
Corporate adviser and transaction sponsor
to Mvela Group and Mvelaserve Limited
Investec Corporate Finance
Legal adviser to Mvela Group and Mvelaserve Limited
Cliffe Dekker Hofmeyr Inc
Sponsor to Mvela Group
Deutsche Securities (SA) (Proprietary) Limited
Enquiries:
Mvela Group 011 684 2652
Yolanda Cuba, CEO
Mvelaserve 087 803 3400
Jorge Ferreira, CEO
College Hill 011 447 3030
Nicholas Williams 082 600 2192
Morne Reinders 082 815 1844
Mvelaserve is a leading provider of outsourced business support services in
South Africa through its portfolio of operating subsidiaries, employing
approximately 30 000 people.
Mvelaserve offers a wide range of intergrated services in the areas of
facilities management, security, catering and cleaning. It also provides
services in the gambling, pie manufacturing, franchising and freight markets.
Mvelaserve is structured to afford substantial autonomy to the business units
where the focus is on organic growth as well as expansion of its service
offerings.
Mvelaserve`s intention is to become the foremost provider of intergrated
outsourced business support services to South Africa and the rest of the
continent.
KEY STRENGTHS
Mvelaserve`s key strengths include:
- Balanced business portfolio
Mvelaserve has a balanced portfolio across its lines of business and
geographies. It has a wide variety of clients including both private
sector and government organisations throughout South Africa.
- Proven financial performance
Mvelaserve has shown significant growth, margin enhancement and increased
profitability over the past few years. This has resulted in strong cash
flows and increased returns to shareholders.
- Operational advantages
Mvelaserve`s operational advantages include, inter alia:
- well established, respected and recognised brands;
- a strong portfolio of blue chip clients;
- strong position in attractive markets, and ability to change and
adapt with growing markets.
- established national footprint.
- an experienced, strong entrepreneurial, carefully selected senior
management, with a proven track record;
- diversified offering of outsourced services to clients;
- a committed and loyal workforce;
- consistently strong corporate governance practices;
- understanding client needs through building strong and long-standing
business relationships;
- preferred supplier status in many industries;
- ability to retain clients;
- ability to cross-sell diverse services to its clients; and
- ability to understand the markets in which it operates.
- Empowerment credentials
As a result of the 100% shareholding by Mvela Group, Mvelaserve has an
effective 77.20% BEE shareholding excluding Mandated Investments (54.75%
BEE shareholding including Mandated Investments). After the listing and
unbundling, Mvelaserve will have a similar shareholder profile as Mvela
Group, giving it a strong BEE ownership percentage.
STRATEGIES FOR GROWTH
Mvelaserve`s strategy is to grow and build the business into the recognised
leading provider of outsourced business support services in South Africa and
the rest of the continent. This will be achieved by:
- Optimising profitability of established businesses
Mvelaserve intends to continue its ongoing business optimisation
programmes, strengthening margins, empowering the management teams of
each subsidiary, and seeking to maximise shareholder returns.
- Improving market positioning
Mvelaserve aims to maintain its recognised leadership position in the
intergrated outsourced business support services markets. Mvelaserve
continually seeks opportunities to further strengthen its position as a
market leader, and believes that it is well-positioned to benefit from
further economic growth in South Africa and the rest of the continent.
- Expanding existing businesses
Mvelaserve intends to penetrate new markets through utilisation of its
BEE credentials and the use of the existing client base, as well as
providing services in selected geographies.
- Growing through strategic acquisitions
Mvelaserve seeks to grow though investingin businesses with the potential
to enhance the current service offering to clients and to grow free cash
flow and return on investment.
- Expanding the Company`s footprint into the continent of Africa
Mvelaserve aims to use its respected and recognised brands to expand the
Group`s footprint in the rest of the continent with respected selected
partners in the target countries.
Date: 07/10/2010 12:53:01 Produced by the JSE SENS Department.
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