| Thu 24 Apr 2003, 12:51 | | Firstrand Limited - Issue And Listing Of Additiona |
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FirstRand Limited - Issue And Listing Of Additional Ordinary Shares And
Declaration Of Directors" Interests
FirstRand Limited
(Incorporated in the Republic of South Africa)
Registration number: 1966/010753/06
Share Code: FSR ISIN: ZAE000014973
("FirstRand" or the "Company")
Issue And Listing Of Additional Ordinary Shares And Declaration Of Directors"
Interests
Rand Merchant Bank is authorised to announce that the JSE Securities Exchange,
South Africa ("JSE") has granted a listing for 15 017 941 additional ordinary
shares in the share capital of FirstRand("new shares")with effect from Wednesday
23 April 2003.
These new shares arise from the conversion of redeemable, convertible preference
shares ("preference shares") issued by the Company on 28 March 2000 to selected
staff members in terms of the FirstRand Out-performance Share Incentive Scheme
("Out-performance scheme" or "Scheme"). The rules of the Out-performance scheme
were approved by FirstRand"s shareholders at a general meeting held on 22 March
2000 and are incorporated in its Articles of Association. In terms of the
Scheme, new FirstRand ordinary shares ("incentive shares") are awarded to
participants in terms of a formula based on the level of "out-performance"
achieved by the FirstRand ordinary share price over the Fini 15 Index. The
index forms part of the "FTSE-JSE Africa Index Series" administered by the JSE
and is composed of the fifteen largest listed financial services organisations
in South Africa. As such, the index reflects the share price performance of
FirstRand"s peer group. Participants are only entitled to the incentive shares
if the FirstRand ordinary share price has shown positive growth over the period.
For this particular tranche of preference shares that falls due for conversion
in terms of the provisions of the scheme:
* The performance measurement period was from end June 1999 to end December
2002;
* FirstRand"s weighted average share price increased by 12,9% while the Fini 15
index declined by 11,4% in this volatile period;
* In the context of FirstRand"s market capitalisation of R39,9bn at end December
2002, the out-performance value that was created and/or preserved (relative to
its Fini 15 peers) amounted to some R10,2bn;
* Approximately one per cent of this value accrued to the participants and
resulted in 15,02m incentive shares being awarded to them, which shares are now
listed on the JSE.
The issue of the incentive shares to staff members will have a dilutory effect
on existing FirstRand shareholders. Had the incentive shares been in issue for
the full six months ended 31 December 2002 (FirstRand"s last reporting period)
the impact, based on actual unaudited results and incorporating the impact of
AC133 would be as follows:
Before After Change
(cents) (cents) (%)
Earnings per share 37,4 37,3 -0,28
Headline earnings per share 40,8 40,7 -0,28
Net asset value per share 402,6 401,5 -0,28
Both in absolute terms and in the context of the shareholder value that was
created and/or preserved by FirstRand, such dilution is not material. As it
represents part of the superior value realised, existing shareholders continue
to be better off than they would have been had they invested in FirstRand"s peer
group.
The FirstRand board believes that the outcome of the conversion of the first
tranche of preference shares in terms of the Out-performance scheme is
gratifying and goes some way in rewarding the superior value delivered to
shareholders by FirstRand"s management team and staff. The remaining tranches of
the scheme should provide FirstRand with a powerful tool with which to retain
and motivate its key staff members.
Declaration of Directors" Interests
In compliance with Rule 3.72 of the JSE Listing Requirements the following
information is disclosed relating to the directors who are participants of the
Out-performance Scheme and who had preference shares converted in this
particular tranche:
Director LL Dippenaar PK Harris VW Bartlett
Nature of interest Indirect Indirect Indirect
Beneficial Beneficial Beneficial
Number of incentive
shares awarded on
conversion 256,431 256,431 192,323
Gain arising on
conversion** R 1,666,802 R 1,666,802 R 1,250,100
** - On 31 March 2003, the day before the scheduled conversion
date, the FirstRand closing price was 650 cents.
Sandton
24 April 2003
Merchant Bank and Sponsor to FirstRand Limited
Rand Merchant Bank
A division of FirstRand Bank Limited
Corporate Finance
Investor Relations Contacts:
JP Burger FirstRand CFO 011 282 1910
AH Arnott FirstRand Company Secretary 011 282 8052
P Cooper FirstRand Executive 021 658 9360
