EXPLORER CORPORATION HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/010950/06)
JSE Share code: EPL ISIN: ZAE000017489
("Explorer")
JOINT VENTURE ANNOUNCEMENT AND
FURTHER CAUTIONARY ANNOUNCEMENT
The directors of Explorer are pleased to announce the successful conclusion
of negotiations relating to some of the issues which were subjects of the
cautionary announcement of 28 February 2002.
1. Introduction
Shareholders are advised that Explorer, in conjunction with Loita Capital
Partners International Limited ("Loita"), its majority shareholder, and
Mauritius Commercial Bank Limited ("MCB"), the largest bank in Mauritius,
have signed an agreement to enter into a joint venture in order to market
Explorer credit cards in Africa.
2. Background
Explorer/Loita
Explorer launched South Africa's first bank independent, VISA branded
credit card during 1999. The launch was very successful in terms of numbers.
Funding restrictions imposed by Explorer's South African banking partner had
a material impact on Explorer's growth and income streams.
A strategic investment in Explorer during 2001 by Loita, a company with a
proven track record in Africa, ensured that Explorer could commence the
implementation of its African expansion strategy.
Furthermore, the directors of Loita identified Explorer as being the
appropriate vehicle to provide financial services products to a currently
untapped African market.
Mauritius Commercial Bank Limited
MCB is one of the oldest banks operating on the African continent. The bank
was incorporated in Mauritius in 1841 and has shown consistent growth since
inception.
MCB now operates in several countries including France, Reunion,
Seychelles, Madagascar and Mozambique. It has expanded its operations to
include MCB Private Banking, MCB Stockbroking, MCB Registry and Securities
and MCB Investment Management. MCB's total assets as at December 2001
amounted to US$2.5 billion.
3. Structure of the joint venture
The joint venture will enter into outsourcing agreements with individual
African commercial banks. Explorer and Loita will manage and market the
credit cards, with MCB providing a banking license (with its associated
deposit taking facilities and VISA/Mastercard licence and issuing
capabilities), back office infrastructure, card management systems and
funding. All cards issued will be collateralised by the African commercial
banks involved.
Due to existing agreements in place between Loita and a number of African
Banks under Loita's management the issuing of cards will be expedited.
Loita will also use its influence in the banking industry to further promote
the issue of Explorer Cards.
Explorer will earn its income from this joint venture in the form of
royalties and value-added products on cards issued.
4. Financial effects
Whilst there will not be any immediate material change to earnings or net
asset value, the joint venture provides the opportunity for Explorer to earn
future income with minimal increase in operating expenses and working
capital.
5. Further cautionary announcement
As Explorer is still involved in further negotiations relating to both its
local operations and its African expansion initiatives, shareholders are
advised to continue exercising caution in dealing in their securities on the
JSE Securities Exchange South Africa until a further announcement is made.
Johannesburg
11 April 2002
Sponsor
Sasfin Bank Limited
(Registration number 1951/002280/06)
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