| Thu 27 Jun 2002, 0:00 | | Proposed Disposal By Saambou Holdings Of Saambou L |
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PROPOSED DISPOSAL BY SAAMBOU HOLDINGS OF SAAMBOU LIFE ASSURANCE LIMITED
("Saambou Life")
SAAMBOU HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004170/06)
Share code: SBO ISIN number: ZAE 000006409
("Saambou Holdings")
PROPOSED DISPOSAL BY SAAMBOU HOLDINGS OF SAAMBOU LIFE ASSURANCE
LIMITED ("Saambou Life")
1. Introduction
Investec Bank Limited, on behalf of the Board of directors of Saambou
Holdings, is authorised to announce that, subject to the finalisation of a
detailed agreement and the conditions precedent set out in paragraph 4
below, agreement in principle has been reached between Saambou Holdings and
Capital Alliance Life Limited ("Capital Alliance Life"), in terms of which
Saambou Holdings will dispose of all of the shares in Saambou Life to
Capital Alliance Life, with effect from 1 April 2002 ("the effective date"),
on the terms as set out in paragraph 3 below ("the Saambou Life disposal").
2. Rationale
The Saambou Life disposal is in line with the strategy outlined in the
previous announcement by Saambou Holdings on the Stock Exchange News Service
("SENS") of the JSE Securities Exchange South Africa ("the JSE") on Friday,
17 May 2002 ("the 17 May announcement"). The Saambou Life disposal will also
generate cash to enable Saambou Holdings to settle its obligations to its
promissory note holders.
3. Salient terms
Prior to the Saambou Life disposal, Saambou Life will pay dividends of
R290,8 million to Saambou Holdings, comprising mainly cash, promissory notes
issued by Saambou Holdings and 1,1 million Saambou Holdings ordinary shares
("the Saambou Life dividends").
Thereafter Saambou Holdings will receive R109,2 million in cash from Capital
Alliance Life ("the Saambou Life disposal consideration") on the second
business day following the fulfilment of the conditions precedent set out in
paragraph 4.4 below ("the closing date").
Interest will be payable by Capital Alliance Life on the Saambou Life
disposal consideration at the average of the call rate and prime rate from
the effective date to the closing date.
The total value to Saambou Holdings from the Saambou Life dividends and the
Saambou Life disposal consideration is approximately R400 million.
The aforementioned values are estimates and the Saambou Life dividends may
change upon finalisation of the audited financial statements of Saambou Life
for the year ended 31 March 2002 and the independent actuarial valuation of
Saambou Life`s insurance reserves and value of in-force business at 31 March
2002.
4. Conditions precedent
The Saambou Life disposal will be subject to the following conditions
precedent:
- obtaining all regulatory approvals required in terms of the Long-Term
Insurance Act, No. 52 of 1998, as amended;
- approval by the Competition Authorities;
- approval of the circular referred to in paragraph 6 below by the JSE; and
- approval by the Saambou Holdings shareholders in general meeting.
5. Financial position of Saambou Holdings after the Saambou Life disposal
The significant assets and liabilities of Saambou Holdings, as well as an
estimated indicative value per Saambou Holdings share subsequent to the
Saambou Life dividends and the Saambou Life disposal are set out in the
table below:
R`m Note
Estimated Saambou Life dividends and 400,0
Saambou Life disposal consideration
Cash disbursements by Saambou (75,6)
Holdings during April 2002 relating
mainly to the settlement of an
amount of R36,8 million owed to
Saambou Bank Limited ("Saambou
Bank") in terms of the Saambou
Holdings Group restructure
previously announced in the 17 May
announcement, preference share
dividends and promissory notes
Saambou Holdings promissory notes (49,8)
held by Saambou Life which will be
included as a distribution in specie
in the Saambou Life dividends
National Insurance Limited 25,0 1
("Natsure")
Obligation at 31 May 2002 to Saambou
Holdings promissory note holders for
the payment of: (60,3) 2
6 semi-annual amounts of R12,6
million each, commencing on 29 (81,6) 2
October 2002; and
5 semi-annual amounts of R19,8
million each, commencing on 29
October 2002
157,7
Saambou Holdings shares in issue 180,8 3
(million)
Estimated indicative value per 87
Saambou Holdings share (cents)
Notes
1. Based on the net asset value of Natsure per the
Natsure management accounts at 31 March 2002.
2. Based on the present value of the Saambou Holdings
promissory notes at 31 May 2002 at a discount rate of
15%, after deducting the Saambou Holdings promissory
notes held by Saambou Life which will be included as a
distribution in specie in the Saambou Life dividends.
3. Based on 165,8 million Saambou Holdings ordinary
shares (after deducting 1,1 million Saambou Holdings
ordinary shares which will be included as a dividend in
specie in the Saambou Life dividends) and 15 million
Saambou Holdings preference shares. This calculation
does not take account of the Saambou Holdings shares
that may be received from Saambou Bank for no
consideration in terms of the Saambou Holdings Group
restructure previously announced in the 17 May
announcement.
6. Circular to shareholders and general meeting
A circular, which is subject to the approval of the JSE and the Securities
Regulation Panel, setting out full details of the Saambou Life disposal and
the Saambou Holdings transactions previously announced in the 17 May
announcement and a notice convening a general meeting of Saambou Holdings
shareholders to approve the Saambou Life disposal and the Saambou Bank
disposal, as described in the 17 May announcement, will be posted to Saambou
Holdings shareholders in due course.
Pretoria
26 June 2002
Merchant bank to Sponsor to Saambou Legal adviser to
Saambou Holdings Holdings Saambou Holdings
Investec Bank Limited Investec Bank Limited Jowell Glyn & Marais
Corporate Finance
Date: 27/06/2002 07:29:25 AM Produced by the SENS Department
