| Thu 28 Jun 2001, 0:00 | | Disposal By Magnum Of Its 50% Interest In Pris |
|
CAUTIONARY ANNOUNCEMENT
Magnum Global Funds SA Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1998/025064/06)
("Magnum" or "the company")
Mercury Consolidated Holdings (PTY) Limited
Registration number 1997/011413/07
("MCH")
DISPOSAL BY MAGNUM OF ITS 50% INTEREST IN PRISM EQUITIES (PROPRIETARY)
LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Further to the cautionary announcement published on 17 May 2001, Trans
Atlantic Securities (Proprietary) Limited is authorised to announce that
Magnum has entered into an agreement ("the disposal agreement") with MCH in
terms of which Magnum has disposed of its 50% shareholding in Prism Equities
(Proprietary) Limited ("Prism") to MCH ("the disposal") with effect from 31
March 2001 ("the effective date").
2. THE DISPOSAL
2.1 In terms of the disposal agreement, the gross purchase consideration for
the disposal is R1 500 000 ("the purchase consideration").
2.2 The purchase consideration was reduced by R150 000 in respect of certain
claims.
2.3 The net purchase consideration amounting to R1 350 000 ("the net
purchase consideration") was settled in cash on 25 June 2001 ("the closing
date").
2.4 In terms of the disposal agreement, Prism repaid an amount of R1 905
106,09 ("the loan interest"), representing interest on Magnum's loan account
in Prism of R10 500 000 ("the loan") on the closing date. The loan will be
repaid in full by Prism on 31 May 2002, while accrued interest thereon will
be repaid monthly in arrears commencing on 31 July 2001.
2.5 Prism had a net asset value of R393 607 at 31 December 2000 and achieved
an after-tax profit of R83 918 during the six-month period then ended.
2.6 The net purchase consideration and the loan interest will be utilised as
working capital in the company.
3. RATIONALE FOR THE DISPOSAL
As a result of, inter alia, delays in the removal of restrictions on the
marketing of hedge funds and alternative investments by the Financial
Services Board and subsequent resistance to Magnum's hedge fund products, it
was decided to dispose of Prism.
4. FINANCIAL EFFECTS
4.1 Had the disposal been effective throughout the six-month period ended 31
December 2000 and, assuming that the loan, the loan interest and the net
purchase consideration, amounting in aggregate to an amount of R13 755
106,09, had been available for investment to yield an after-tax return of
8,05%, Magnum's loss and headline loss per share for the six-month period
then ended would have decreased by 0,46 cent from (1,59) cents to (1,13)
cents and from (1,50) cents to (1,03) cents, respectively.
4.2 Had the disposal been effective at 31 December 2000 and had the amount
of R13 755 106,09 been received on that date, Magnum's net asset value per
share at that date would have increased by 1,54 cents from 20,42 cents to
21,96 cents.
5. FURTHER CAUTIONARY ANNOUNCEMENT
Proposals referred to in the cautionary announcement published on 17 May
2001 are still under consideration ("the current proposals"). Shareholders
are referred to the press announcement published on 2 May 2001, dealing
with, inter alia, a proposed change of Magnum's name as a result of the
changing business focus of the company. The current proposals, if
implemented, will result in the proposed name change not being proceeded
with. The current proposals, if implemented, may have a material effect on
Magnum's share price and shareholders are accordingly advised to continue
exercising caution in dealing in their shares until a further announcement
is made.
Johannesburg
28 June 2001
Corporate advisers and sponsor
Trans@lantic Securities (Pty) Ltd
Corporate Finance
(Registration number 1999/000210/07)
Attorneys to Magnum
Werksmans Attorneys
Attorneys to MCH
Feinsteins Attorneys
(Registration number 1995/001716/21)
