FirstRand Limited - Acquisition of motor vehicle f
FirstRand Limited - Acquisition of motor vehicle finance book
FIRSTRAND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1966/010753/06)
Share code: FSR
ISIN: ZAE 000014973
Acquisition of motor vehicle finance book
Introduction
RMB Corporate Finance is authorised to announce that agreement has been reached
between Wesbank, a division of FirstRand Bank Limited ("Wesbank") and Barloworld
Limited ("Barloworld") in terms of which Wesbank will acquire Barloworld`s third
party South African motor vehicle finance book ("the transaction").
Terms of the transaction
The estimated consideration payable by Wesbank in terms of the transaction is
R830 million, payable in cash. The final consideration will be determined based
on the value of the finance contracts being acquired as at the effective date.
The transaction is subject to approval by the Competition Tribunal, and the
effective date for the transaction will be the first day of the month following
such approval by the Competition Tribunal.
Rationale for the transaction
Wesbank is a leading provider of vehicle finance and related financial services
in South Africa. The acquisition of Barloworld`s motor vehicle finance book is
a natural extension of Wesbank`s vehicle financing operations, and the
transaction will enable Wesbank to increase the size of its motor vehicle
finance book without any significant increase in its cost base. This will allow
Wesbank to further enhance its economies of scale, whilst continuing to provide
its customer base with optimal levels of service.
Furthermore, Wesbank has identified a number of opportunities to provide
expanded services to certain of the customers being acquired, further enhancing
the benefits of the transaction to Wesbank and its customers. Wesbank will
outsource certain products to its specialist vehicle management associate
company, Avis Fleet Services.
Financial effects of the transaction
Although the transaction is expected to be earnings enhancing for Wesbank, it
will not have a material effect on the earnings or net asset value of FirstRand.
Sandton
17 October 2002
Merchant bank and sponsor to FirstRand
Rand Merchant Bank Corporate Finance
Date: 17/10/2002 07:15:00 AM Produced by the JSE SENS Department
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