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Investec Plc - Reinsurance and subsequent transfer of Investec Employee Benefits
Limited businesses to Liberty Group Limited
Investec plc
Incorporated in the Republic of South Africa
(Registration number 3633621)
Share code: INP
ISIN code: GB0031773103
("Investec" or the "Company")
Reinsurance and subsequent transfer of Investec Employee Benefits Limited
businesses to Liberty Group Limited ("the Proposed Transaction")
1. Introduction
Investec Bank Limited is authorised to announce that Investec Employee Benefits
Limited ("IEB") (formerly Fedsure Life Assurance Limited) and Liberty Group
Limited ("Liberty") have agreed, subject to the fulfilment of the suspensive
conditions referred to below, that:
- with effect from 31 March 2003, Liberty will reinsure a portion of IEB"s
policyholder liabilities ("the Reinsured Businesses");
- Liberty will assume the administration of the above policies with effect
from a target date of 1 August 2003; and
- IEB and Liberty will apply for a Court Order in terms of section 37 of the
Long Term Insurance Act, to formally transfer the policyholder liabilities to
Liberty ("the Transfer Businesses") ("the S37 Transfer").
IEB has entered into separate Agreements with Liberty, to effect the assumption
of risk, administration and transfer of the Reinsured Businesses and the
Transfer Businesses.
2. Rationale
Further to the previously announced individual life and annuity reinsurance
transactions with Capital Alliance Life Limited the Proposed Transaction has
been concluded to:
- place the Reinsured Businesses and Transfer Businesses with Liberty who are
one of the leading providers of fund benefit and administration services;
- reduce Investec"s exposure to administration intensive businesses, which
require significant infrastructure and ongoing investment; and
- transfer liabilities of approximately R3 700 million to Liberty.
Post the implementation of the Proposed Transaction IEB will mainly comprise:
- Risk Only Business, with the intention to grow market share and to become a
significant player; and
- Investment Only Business, which is effectively an asset management function.
IEB will continue to manufacture appropriate investment and risk products to
distribute to its client base.
3. The Proposed Transaction
3.1 The reinsurance agreement
The Reinsured Businesses comprise the fully administered risk business, the
existing disability claimants business and portions of the fully administered
smooth bonus business.
3.2 The administration agreement
IEB has agreed to transfer the administration of the Reinsured Businesses and
the Transfer Businesses to Liberty. The target date for this transfer is 1
August 2003. As part of this agreement, all of IEB"s staff currently responsible
for the administration of these policies will be transferred to Liberty.
3.3 The transfer agreement
IEB and Liberty have agreed to seek a formal transfer, in terms of section 37 of
the Long Term Insurance Act, of the Transfer Businesses to Liberty.
4. Suspensive condition
The Proposed Transaction is subject to the approval of the competition
authorities.
15 April 2003
Merchant Bank and Adviser Attorneys
Investec Bank Limited Jowell Glyn & Marais Inc
(Registration number 1969/004763/06) (Registration number
1990/000849/21)
Sponsor
Investec Securities Limited
Member of the JSE
Registration No. 1972/008905/06
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