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Investec receives approval for Johannesburg/London listing
Investec Group Limited ("Investec"), the international specialist banking
group, has today received approval from the South African Ministry of
Finance, subject to compliance with a number of conditions to pursue a
listing on the Johannesburg and London Stock Exchanges using a dual listed
companies ("DLC") structure. Investec intends to commence with the listing
process immediately.
The Investec group will be reorganised so that all the non-Southern African
operations (except Mauritius) are held by Investec Plc, which will then be
unbundled and will apply for a primary listing on the London Stock Exchange
("LSE"). Investec SA will hold all the Southern African operations and will
maintain its primary listing on the JSE Securities Exchange South Africa
("the JSE"). Investec SA and Investec Plc will enter into agreements that
have the effect of enabling the Investec group to continue to operate and be
managed as if it were a single economic enterprise. Investec SA will apply
for a secondary listing on the LSE and Investec Plc will apply for a
secondary listing on the JSE.
Background and Rationale
Investec is an international specialist banking group offering innovative
and specialised services to select clients internationally in four key
areas: investment banking, treasury and finance, asset management and
private client activities. Since the early 1990s, Investec has followed an
internationalisation strategy and today has operations in 14 countries
around the world. As at 30 September 2001, international operations
accounted for 45% of headline attributable earnings and 60% of its assets.
Investec is competing in an increasingly global business where the
availability and cost of capital is vitally important. By implementing the
DLC structure, Investec will benefit by increasing its global profile,
enhancing capital raising capability, lowering its cost of capital and
improving access to international capital markets.
The primary listing of Investec's international business operations on the
LSE does not in any way detract from Investec's continued commitment to the
growth and development of its Southern African business.
Details of the DLC Structure
Following implementation of the DLC, current Investec shareholders will
separately hold shares in both Investec SA and Investec Plc, each of which
will be able to be traded independently of the other. Each share in Investec
SA and Investec Plc will have equivalent economic and voting rights in the
combined Investec group. Voting procedures will enable shareholders of
Investec Plc and Investec SA to vote on key matters affecting the combined
group as if they formed a single electorate. In effect, shareholders of
Investec SA and Investec Plc will have an effective interest in a single
economic enterprise comprising all the assets of Investec Plc and Investec
SA.
Board and Management
The Boards of Directors of Investec SA and Investec Plc will be identical.
They will each be supported by a regional management forum (one based in
South Africa, dealing with Investec SA matters, and the other based in the
UK, dealing with Investec Plc matters) and a global management forum dealing
with group-wide issues. Investec SA, Investec Plc and their respective
subsidiary companies will continue to operate and be managed as if they were
a single unified business. The headquarters for Investec SA and the combined
group will be based in South Africa whilst the headquarters for Investec Plc
will be based in the UK.
Financial Information
Investec SA and Investec Plc will maintain a 31 March financial year end and
intend to prepare a single set of consolidated accounts in accordance with
UK GAAP, denominated in Sterling, and such other financial information
required to meet their respective local requirements.
Dividends
Dividends will be determined by the Boards of Directors based on the
distributable reserves of the combined group, and will be paid to
shareholders of Investec SA and Investec Plc simultaneously. Dividends will
be determined in Sterling on an equalised net cash payable basis such that
the holder of one ordinary share in Investec SA will be paid the same cash
dividend as the holder of one ordinary share in Investec Plc. Shareholders
registered on the South African registers will be paid their dividends in
Rand and shareholders registered on the UK registers will be paid their
dividends in Sterling.
Ministry: Finance
The Minister of Finance has taken particular care in this lengthy process to
ensure that the structure will not result in any adverse consequences on the
Rand, and the conditions imposed outline the measures regulating the
management and operation of the combined group. Shareholders should
specifically note the following:
There will be no blanket cross guarantees between Investec Plc and Investec
SA.
South African resident shareholders of Investec Plc will be required to hold
their Investec Plc shares through its South African branch register. These
shares will be traded on the JSE.
Approval Process and Timing
Implementation of the DLC structure will require a reorganisation of the
Investec group and the unbundling of Investec Plc and is conditional upon
shareholder approval of Investec Holdings Limited and Investec as well as
and regulatory approvals. A further announcement will be made in due course.
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