| Thu 7 Apr 2011, 17:05 | | MVG / MVGP - Mvelaphanda Group Limited - Disposal of life healthcare group |
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MVG MVGP
MVG
MVG / MVGP - Mvelaphanda Group Limited - Disposal of life healthcare group
holdings limited ("LIFE HEALTHCARE") shares
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")
DISPOSAL OF LIFE HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE HEALTHCARE") SHARES
1. INTRODUCTION
Shareholders of Mvela Group are advised that the Company disposed of 3 million
Life Healthcare ordinary shares ("Life Healthcare shares") on the JSE Limited
("JSE") open market during the period 7 February 2011 to 31 March 2011 ("the
open market disposals"). The cash consideration received in respect of the open
market disposals amounted to approximately R45.7 million. Further, the Company
disposed of 9 million Life Healthcare shares to Laurium Capital (Proprietary)
Limited ("Laurium Capital") for a cash consideration of R139 million on 4 and 5
April 2011. The open market disposals and the disposal to Laurium Capital are
collectively referred to as "the Disposal".
2. NATURE OF BUSINESS OF LAURIUM CAPITAL
* Laurium Capital is an investment manager running various funds investing in
Sub-Saharan Africa.
* Laurium Capital was formed in 2008 and is based in Johannesburg South
Africa.
* Laurium Capital has over 60 years aggregate investment experience between 2
principals and 4 investment professionals.
3. RATIONALE
The Disposal is part of Mvela Group`s overall value unlocking strategy to
realise value for its shareholders. The proceeds from the sale will be used to
pay down certain debt of portfolio companies.
4. CONSIDERATION RECEIVED
The total cash consideration received in respect of the Disposal is
approximately R184 million net of all transaction costs. The sale proceeds of
the Disposal will be utilised to pay down certain debt of portfolio companies.
5. CATEGORISATION OF THE DISPOSAL
In terms of the JSE Listings Requirements, the Disposal is categorised as a
category 2 transaction.
6. FINANCIAL EFFECTS
The unaudited pro forma financial effects of the Disposal set out below have
been prepared to assist Mvela Group shareholders in assessing the impact of the
Disposal on the Company`s historical earnings per ordinary share ("EPS"),
headline earnings per ordinary share ("HEPS"), net asset value per ordinary
share ("NAVPS") and net tangible asset value per ordinary share ("NTAVPS").
The pro forma financial effects are the responsibility of the directors of
Mvela Group and are provided for illustrative purposes only.
The pro forma financial effects have been prepared on the basis that the
Disposal had been fully implemented on 1 July 2010 for Income Statement purposes
and as at 31 December 2010 for purposes of the Statement of Financial Position.
It does not purport to be indicative of what the consolidated financial
results would have been had the Disposal been implemented on a different date.
The material assumptions are set out in the notes following the table.
Due to their nature, the pro forma financial effects may not fairly present
the financial position, changes of equity, results of operations or cash flows
of Mvela Group after the Disposal.
The net value of and the after tax profits attributable to the net assets of
Life Healthcare are R155 093 597 and R18 459 398 respectively. The Company`s
remaining investment in Life Healthcare after the Disposal amounts to 22 385 280
Life Healthcare shares or 2,15% of the total issued Life Healthcare shares.
Before the After the Percentage
Disposal(1) Disposal change (%)
EPS (cents) (53,6) (53,6) 0%
HEPS (cents) (0,7) (0,6) 14,29%
NAVPS (cents) 359,2 365,1 1,64%
NTAVPS (cents) 359,2 365,1 1,64%
Weighted average number of 458 467 458 467 0%
shares in issue* (`000)
Net number of ordinary 565 474 565 474 0%
shares in issue (`000)
* excludes treasury shares
Notes:
1. Extracted from Mvela Group`s published unaudited interim results for six
months ended 31 December 2010.
2. The pro forma adjustments to the statement of comprehensive income and the
statement of financial position have been calculated on the assumption that the
Disposal was implemented on 1 July 2010 and 30 December 2010 respectively.
3. The proceeds received from the Disposal of R184 million have been used to
reduce interest bearing debt of portfolio investments.
4. Interest paid has been reduced by R6 million as a result of the Disposal
proceeds applied to interest bearing debt. Taxation of R1,7 million claimed in
respect of this has been reversed.
5. A profit on the Disposal of R18,5 million has been recognised being the
difference between the fair value of Life Healthcare shares at 1 July 2010 of
R13,55 per share and the net proceeds received on the Disposal of R184 million.
6. A deferred taxation liability of R18 627 933 as at 1 July 2010 has been set
off against the CGT incurred on the profit from the Disposal.
7. The fair value adjustment of R12 981 955 less CGT of R1 817 474 provided for
the six months ended 31 December 2010 have been reversed.
8. The pro forma financial effects have been prepared using the same accounting
policies as those applied in the most recently published annual financial
statements of Mvela Group.
7 April 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 07/04/2011 17:05:02 Produced by the JSE SENS Department.
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