| Wed 30 Jan 2002, 0:00 | | Proposed Listing Of Caphold On The Jse Securities |
|
("the JSE") pursuant to the unbundling of psgbh's 72,47% shareholding in
Caphold
PSG Investment Bank Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/017358/06)
("PSGBH" )
(Share Code: PSG ISIN Code: ZAE000018818)
Capitec Bank Holdings Limited
(Currently Keynes Rational Limited, the name of which it is proposed
to change to Capitec Bank Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1999/025903/06)
("Caphold")
(Share Code: CPI ISIN Code: ZAE000035861)
Proposed listing of Caphold on the jse Securities Exchange South Africa
("the jse") pursuant to the unbundling of psgbh's 72,47% shareholding in
Caphold
1. INTRODUCTION AND BACKGROUND
1.1 The board of directors of PSGBH has resolved to effect the
restructuring of the PSGBH group of companies ("the restructuring").
1.2 As a result of the completion of the acquisition by PSGBH of
Real Africa Durolink Holdings Limited ("RADH"), the PSGBH group currently
has three banking licences, held by:
- PSG Investment Bank Limited ("PSGIB"), a wholly-owned subsidiary of
PSGBH;
- Capitec Bank Limited ("Capitec Bank"), a wholly-owned subsidiary of
Caphold, in which PSGBH holds a 72,47% interest; and
- Real Africa Durolink Investment Bank Limited ("RAD"), a wholly-owned
subsidiary of RADH, in turn a wholly-owned subsidiary of PSGBH.
1.3 The commercial, strategic and regulatory objectives of the
restructuring will be to:
1.3.1 align the corporate structure of PSGBH with the structure of
its business activities;
1.3.2 centralise the banking activities of PSGBH and RAD in a
single entity regulated by the Banks Act, 1990 (Act 94 of 1990), as amended,
thereby enhancing risk management and bank governance, at the same time
reducing the number of banking licences held by the PSGBH group to one
licence;
1.3.3 create a flexible and clearly defined corporate structure;
1.3.4 ease the house and record-keeping burden inherent in the
existing cumbersome corporate structure, thus reducing administrative and
management costs; and
1.3.5 create a more effective corporate structure in terms of
business focus and management responsibility and accountability.
2. UNBUNDLING OF PSGBH'S ENTIRE INTEREST IN CAPHOLD
2.1 PSGBH holds a 72,47% interest in Caphold as an asset for
resale. As a first step in the restructuring, PSGBH intends unbundling this
interest in Caphold to PSGBH shareholders. The board of directors of PSGBH
has accordingly resolved, subject to fulfilment of the conditions precedent
set out in paragraph 8 below ("the conditions precedent"), that PSGBH
distribute in specie, by way of a reduction of PSGBH's share premium account
in terms of section 90 of the Companies Act, 1973 (Act 61 of 1973), as
amended, all of the 48 306 002 Caphold shares held by PSGBH ("the Caphold
unbundling shares") to PSGBH shareholders on a pro rata basis ("the
unbundling").
2.2 In terms of the unbundling, PSGBH shareholders registered as
such on the record date, which is expected to be Friday, 22 February 2002
(the record date), will receive 3,37349 Caphold shares for every 100 PSGBH
shares held on the record date.
3. LISTING OF CAPHOLD ON THE JSE
3.1 It is proposed that, subject to the fulfilment of the
conditions precedent, Caphold be listed in the Financial - "Financial
Services" sector of the JSE list with effect from Monday, 18 February 2002.
3.2 After the unbundling and the listing of Caphold on the JSE, the
Caphold group structure will be as follows:
(1) Including PSGBH shareholders other than PSG Group Limited.
(2) To be listed on the JSE.
4. NATURE OF BUSINESS OF CAPHOLD
4.1 Caphold and its subsidiaries ("the Caphold group") operate as
specialist financial services providers to the lower-income, historically
underbanked sector.
4.2 Caphold's vision is to develop its main operating subsidiary,
Capitec Bank, into a fully-fledged retail bank to the "underbanked" through
a national network of outlets accessible to its target market.
4.3 The Caphold group's core businesses are short-term lending and
banking services, as set out below.
4.4 Capitec Bank is a registered bank which provides 30-day loans
to the lower- income sector through its operating divisions, Capitec and
Finaid, and commercial banking services through its Capitec CBS division. In
addition, Capitec Bank is about to commence the provision of retail banking
services to its target market through its Capitec division. Such services
will include savings products and transacting facilities. The businesses of
Capitec Bank's operating divisions are described below:
4.4.1 Finaid focuses on short-term loans to individual clients in
the LSM3 - LSM5 categories. The average monthly household income in these
categories ranges from R1 113 to R2 289. This product range will be extended
to include longer-term loans.
4.4.2 Capitec provides slightly higher value financing to clients
in the LSM4 - LSM7 categories (average monthly household income ranging from
R1 595 to R5 495) within a more structured environment. In addition, Capitec
is about to commence a roll-out programme enabling it to provide savings
products and transacting facilities to its clients through a card
based system.
4.4.3 Capitec CBS provides unsecured commercial loans on a "load-
over-load" basis to small, medium and micro enterprises in the informal
commercial marketplace.
5. RATIONALE FOR THE UNBUNDLING AND THE LISTING OF CAPHOLD
5.1 The main purpose of the unbundling is for PSGBH shareholders to
acquire directly, by way of a distribution in specie, the Caphold unbundling
shares.
5.2 The PSGBH group is an investment banking group, focusing on a
comprehensive range of integrated services including corporate finance and
proprietary investments, structured and project finance, treasury services,
structured products and corporate services.
5.3 The Caphold group provides specialist financial services to the
lower-income, historically underbanked sectors.
5.4 The unbundling and the listing of Caphold will:
- implement the philosophy of the PSG group in enabling growth
opportunities to develop into mature businesses;
- give PSGBH shareholders increased flexibility and the ability to
retain or dispose of the Caphold unbundling shares in accordance with their
own investment policies and preferences; and
- result in Caphold shares becoming more tradeable by virtue of the
Caphold shares being listed on an acknowledged stock exchange and being
widely held by PSGBH shareholders.
6. FINANCIAL EFFECTS OF THE UNBUNDLING
6.1 On PSGBH shareholders
The unbundling will not have any effect on the aggregate earnings,
headline earnings, net asset value and net tangible asset value attributable
to a PSGBH shareholder, save that upon implementation of the unbundling,
PSGBH shareholders will receive those numbers of Caphold unbundling shares
which are equivalent to their indirect effective interests in those shares
prior to implementation of the unbundling. Consequently, after
implementation of the unbundling, earnings and net asset value in respect of
Caphold shares will be directly attributable to PSGBH shareholders.
6.2 On PSGBH
The table below sets out the pro forma financial effects of the
unbundling on the earnings, headline earnings, net asset value and net
tangible asset value per PSGBH share. In this information, which is the
responsibility of the directors of PSGBH, it is assumed that the unbundling
will not be deemed a dividend for STC purposes.
Actual Pro forma
Before the After the
unbundling unbundling Change
(cents) (cents) (%)
Earnings per share for the
6 months to 31 August 2001 11,1(1) 12,6(2) 13,5
Headline earnings per share for
the 6 months to 31 August 2001 7,4(1) 9,0(2) 21,6
Net asset value per share at
31 August 2001 125,2(1) 98,3(3) (21,5)
Net tangible asset value per
share at 31 August 2001 124,0(1) 97,1(3) (21,7)
Notes:
(1) As extracted from PSGBH's unaudited interim results for the six-
month period ended
31 August 2001.
(2) Based on the assumption that the unbundling was effected on 1 March
2001 and on a weighted average of 1 252 253 656 PSGBH shares in issue for
the six-month period ended 31 August 2001.
(3) Based on the assumption that the unbundling was effected on 31
August 2001 and on
1 431 929 214 PSGBH shares in issue at 31 August 2001.
A reporting accountants' report on the pro forma financial effects of
the unbundling on PSGBH will be included in the circular to PSGBH
shareholders referred to in paragraph 9 below.
7. APPROVALS OBTAINED
The following approvals in respect of the unbundling and the listing of
Caphold have been obtained:
7.1 from the Exchange Control department of the South African
Reserve Bank, approval for the unbundling and listing of Caphold;
7.2 from the Competition Commission, confirmation that the
unbundling by PSGBH of its controlling interest in Caphold to PSG Group
Limited ("PSG Group") was not a notifiable merger in terms of the
Competition Act, 1998 (Act 89 of 1998), as amended;
7.3 from the JSE, approval for the listing of Caphold; and
7.4 from the Securities Regulation Panel, confirmation that the
increase in PSG Group's direct interest in Caphold pursuant to the
unbundling does not constitute an affected transaction.
8. CONDITIONS PRECEDENT TO THE UNBUNDLING AND THE LISTING OF CAPHOLD
The unbundling and the listing of Caphold are subject to the following
outstanding conditions precedent:
8.1 PSGBH shareholders in general meeting passing the ordinary
resolutions necessary to implement the unbundling;
8.2 Caphold shareholders in general meeting passing the requisite
resolutions to prepare Caphold for listing and authorise the listing of
Caphold;
8.3 the Registrar of Banks approving the unbundling and the
listing of Caphold;
8.4 the Minister of Finance, through the Registrar of Banks,
approving PSG Financial Services Limited, a wholly-owned subsidiary of PSG
Group, increasing its direct percentage interest in Caphold pursuant to the
unbundling from 7,44% to 50,93%; and
8.5 the South African Revenue Service approving the unbundling as
an "unbundling transaction" in terms of section 60 of the Income Tax Act,
1993 (Act 113 of 1993), as amended.
9. DOCUMENTATION AND NOTICES OF GENERAL MEETINGS OF CAPHOLD AND PSGBH
9.1 A circular containing a notice of general meeting of Caphold
shareholders was posted to Caphold shareholders on 16 January 2002. Caphold
shareholders holding or controlling 90,46% of Caphold's issued share capital
have given written undertakings to vote in favour of all resolutions to be
proposed at the general meeting of Caphold shareholders, convened for
Thursday, 7 February 2002.
9.2 A circular containing full details of the unbundling and a
notice of general meeting of PSGBH shareholders, as well as a Pre-listing
Statement on Caphold, will be posted to PSGBH shareholders today. PSGBH
shareholders holding or controlling 60% of PSGBH's issued share capital have
given written undertakings to vote in favour of all resolutions to be
proposed at the general meeting of PSGBH shareholders convened for Friday,
15 February 2002.
10. FURTHER ANNOUNCEMENT
A further announcement setting out details of the unbundling, including
the salient dates for the unbundling and details of the listing of Caphold,
will be published in the press in due course.
Johannesburg Stellenbosch
31 January 2002 31 January 2002
Investment bank and
joint sponsor
PSG Investment Bank
Lead sponsor
Pricewaterhouse Coopers
Pricewaterhouse Coopers Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Attorneys to PSGBH
FRRW
Fluxman Rabinowitz - Raphaely Weiner
Attorneys to Caphold
Jan S. de Villiers
Attorneys
Auditors and reporting accountants
Pricewaterhouse Coopers Inc
Chartered Accountants
Registered Accountants (SA)
Registered Accountants and Auditors
(Registration no 1998/012055/21)
