| Thu 21 Jul 2011, 9:27 | | MVG/MVGP - Mvela Group - Disposal of Further Life Healthcare Group |
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MVG MVGP
MVG
MVG/MVGP - Mvela Group - Disposal of Further Life Healthcare Group
Holdings Limited shares and collar option transaction in respect of 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 FURTHER LIFE HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE
HEALTHCARE") SHARES AND COLLAR OPTION TRANSACTION IN RESPECT OF LIFE
HEALTHCARE SHARES
1. INTRODUCTION
Shareholders of Mvela Group are advised that the Company has disposed of
a further 1 500 000 Life Healthcare ordinary shares ("Life Healthcare
shares") on the JSE Limited ("JSE") open market during the period 5 July
2011 to 8 July 2011 ("the open market disposal") for a total cash
consideration of approximately R26 236 206. In addition, on 15 July 2011
Mvela Group entered into a collar option transaction with a commercial
bank in respect of 7 000 000 Life Healthcare shares ("the collar option
transaction"). The deemed value of the collar option transaction is R122
500 000 which is based on the reference price, per the agreement, of a
Life Healthcare share of R17.50. In terms of the JSE Listings
Requirements, the collar option transaction is required to be reported as
if it has already been effected.
It was announced on 8 July 2011 and 7 April 2011 that Mvela Group
disposed of a total of 17 435 377 Life Healthcare ordinary shares for a
total cash consideration of approximately R276 million ("the previous
disposals").
To date 18 935 377 Life Healthcare shares have been disposed of by the
Company and its remaining investment in Life Healthcare after the open
market disposal amounts to 15 449 903 or 1.48% of the total issued Life
Healthcare shares.
2. RATIONALE
The disposals of the Life Healthcare shares are part of Mvela Group`s
overall unlocking strategy to realise value for its shareholders. The
sale proceeds have been utilised to pay down certain debt of portfolio
companies. The collar option transaction has been entered into to lock in
shareholders` value.
3. CONSIDERATION RECEIVED IN RESPECT OF DISPOSALS
The total cash consideration received in respect of the open market
disposal is approximately R26.2 million net of all transaction costs.
4. JSE CATEGORISATION
In terms of the JSE Listings Requirements, the aggregation of the open
market disposal, the collar option transaction and the previous disposals
is categorised as a category 2 transaction.
5. FINANCIAL EFFECTS
The unaudited pro forma financial effects of the previous disposals and
the open market disposal (collectively the "Disposals") set out below
have been prepared to assist Mvela Group shareholders in assessing the
impact of the Disposals on the Company`s historical earnings per 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
Disposals 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. The pro forma financial effects do not purport to be
indicative of what the consolidated financial results would have been had
the Disposals 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 Disposals.
The net value of and the after tax profits attributable to the net assets
of Life Healthcare are R248 340 711 and R38 510 994, respectively.
Before the After the Percentage
Disposals (1) Disposals change
EPS (cents) (53.6) (53.6) 0%
HEPS (cents) (0.7) (0.6) 14.29%
NAVPS (cents) 359.2 369.6 2.59%
NTAVPS (cents) 359.2 369.6 2.59%
Weighted average number 458,467 458,467 0%
of 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. R254.5 million of the proceeds received from the Disposals has been
used to reduce interest bearing debt of portfolio investments.
3. R46.8 million of the proceeds received from the open market disposal
have been used to pay down CGT obligations.
4. Interest paid has been reduced by R6.1 million as a result of the
disposal proceeds applied to interest bearing debt. Taxation of R2.4
million claimed in respect of this has been reversed.
5. A profit on the Disposals of R38,5 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 Disposals
of R301,3 million.
6. A deferred taxation liability of R29,393,911 as at 1 July 2010 has
been set off against the CGT incurred on the profit from Disposals.
7. The fair value adjustment of R24,683,766 less CGT of R3,455,727
provided for the six months ended 31 December 2010 have been reversed.
8. No potential impact of the collar option transaction on the Company`s
historical EPS, HEPS, NAVPS and NTAVPS has been taken into account in the
calculation of the pro forma financial effects.
9. 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.
Johannesburg
21 July 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 21/07/2011 09:27:01 Produced by the JSE SENS Department.
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