| Wed 28 May 2003, 18:07 | | Thebe Fin. Services Ltd/ Thebe Inv. Corp - Sale Of |
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Thebe Fin. Services Ltd/ Thebe Inv. Corp - Sale of TFS" remaining assets, its
delisting, an initial distribution and its winding-up
Thebe Financial Services Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/092509/06)
Share Code: TBE ISIN: ZAE000017265
("TFS" or "the Company")
Thebe Investment Corporation (Pty) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/001846/07)
("TIC")
Announcement regarding the sale of TFS" remaining assets, its delisting, an
initial distribution and its winding-up
1. Introduction
Nedbank Corporate, a division of Nedbank Limited is authorised to announce
that agreement has been reached between TFS and TIC whereby, subject to the
fulfilment of the conditions referred to in paragraphs 3.3 and 3.4 below, TFS
would dispose of its 50,01% shareholding in Thebe Risk & Benefits Group Holdings
(Proprietary) Limited ("TRBGH") and its 51% shareholding in Safrican Insurance
Company Limited ("Safrican") to TIC (collectively, "the sales"). Accordingly,
the directors of TFS propose to apply the sale consideration, less transaction
costs, to make an initial distribution of 19,53 cents per share and then delist
and wind-up the Company. A final liquidation distribution is not expected to be
paid and, if paid, is in any event not expected to be material.
2. Rationale
Following the curatorship and subsequent sale of FBC Fidelity Bank Limited
("FBC") on Friday, 19 May 2000 (which was the major asset of TFS) to Nedcor
Limited, TFS was left with the two investments, being TRBGH and Safrican. These
two businesses are operating in a tough environment, which relies heavily on
empowerment credentials. Unfortunately, the collapse of FBC meant that the
empowerment shareholding of Thebe Financial Holdings (Proprietary) Limited
("TFH"), the parent company of TFS, may be diluted. TFH, through the collapse of
FBC, may loose control of the various special purpose vehicles ("SPV"), which
hold shares directly in TFS. The funding arrangements in these SPV"s have fallen
due. Accordingly, the board of directors of TFS has resolved to conclude the
sales and proceed to wind-up TFS.
3. The sales
3.1 Subject to the fulfilment of the conditions set out below, TIC will acquire
from TFS:
- 50,01% shareholding in TRBGH ("the TRBGH sale"); and
- 51% shareholding in Safrican ("the Safrican sale").
The sales agreements contain terms and conditions typical for transactions of
this nature. The sales are both related party transactions in terms of the
Listings Requirements ("Listings Requirements") of the JSE Securities Exchange
South Africa ("JSE"), as TIC is the ultimate holding company of TFS. The TRBGH
sale is also a category 1 transaction for the purposes of the Listings
Requirements and an affected transaction for the purposes of the Securities
Regulation Panel"s ("SRP") Code. Accordingly, the sales require the approval of
TFS shareholders (excluding the vote of TFH, which holds 56,7% of the
shareholding in TFS. TIC, in turn holds 60,88% of the shareholding in TFH). In
addition, IFH will not be taken into account in determining the quorum in
respect of ordinary resolutions approving the sales.
3.2 The aggregate consideration of R55 719 000 ("the sale consideration") is
payable in cash. This comprises:
- R45 009 000 for TFS" 50,01% shareholding in TRBGH. In addition, TIC will pay
TFS a further R3 000 600 if a new contract is concluded between Thebe Ya Bophelo
Healthcare Administration (Proprietary) Limited (or any other company within the
TIC group of companies) and the Hosmed Medical Aid scheme before 31 December
2003; and
- R10 710 000 for TFS" 51% shareholding in Safrican.
3.3 The implementation of the TRBGH sale remains subject to the fulfilment of
the following conditions precedent:
- the passing by the shareholders in general meeting (excluding TFH), of a
resolution approving the terms and conditions of the TRBGH sale in accordance
with the provisions of section 228 of the Companies Act, 1973 ("Act 61 of
1973"), as amended; and
- the approval of the TRBGH sale by the Competition Commission.
3.4 The Safrican sale has been implemented, but is subject to a resolutive
condition (as between TFS and TIC) that the shareholders in general meeting
(excluding TFH) pass a resolution approving the terms and conditions of the
Safrican sale.
4. Dividends and claims
TRBGH will, subject to the TRBGH sale becoming unconditional but prior to the
implementation of the TRBGH sale, declare and make payment of an aggregate
dividend of R5 400 000 of which R2 700 540 will be payable to TFS.
Safrican has declared and made payment of a dividend of R4 000 000 of which R2
040 000 accrued to TFS, subject to the Safrican sale becoming unconditional but
prior to its implementation. Safrican has also repaid TFS" shareholder"s loan of
R2 550 000 subject to the same condition.
5. Summary of cash flows to TFS
The table below sets out the cash flows to TFS pursuant to the sales and the
dividends and repayment of claims referred to in paragraphs 3 and 4 above.
R
SAFRICAN
Sale consideration 10 710 000
Claims repaid 2 550 000
Dividend 2 040 000
15 300 000
TRBGH
Sale consideration 45 009 000
Deferred consideration 3 000 600*
Dividend 2 700 540
50 710 140
Total payable to TFS 66 010 140*
* R3 000 600 only payable if the contract referred to in paragraph 3.2 is
concluded
6. Initial distribution, delisting, winding-up and final distribution
Subject to shareholder approval:
6.1 TFS will apply the sale consideration, less transaction costs, to make an
initial distribution of 19,53 cents per share to the shareholders of TFS
registered as such on Friday, 27 June 2003. A final liquidation distribution is
not expected to be paid, and in any event if paid, is not expected to be
material;
6.2 application has been made to the JSE for the termination of the listing of
TFS on the JSE with effect from the commencement of trade on Tuesday, 1 July
2003; and
6.3 TFS will be wound-up in terms of a members" voluntary winding-up.
7. Financial effects of the sales and the initial distribution
The table below sets out the unaudited pro forma financial effects of the
sales on TFS. The unaudited pro forma financial effects are provided for
illustrative purposes only. Because of their nature, the unaudited pro forma
financial effects may not give a fair reflection of TFS" financial position or
the effect on future income.
After After After
the the the After
Cents Before TRBGH Safrican sales Percentage initial Percentage
sale sale change distribution change
EPS for the
period ended
30 September
2002 (7,69) (7,00) (7,98) (7,29) 5,2 (8,31) (14,0)
HEPS for the
period ended
30 September
2002 1,38 2,06 1,09 1,78 29,0 0,75 (57,9)
NAV at
30 September
2002 26,95 26,95 26,95 26,95 - 7,42 (72,5)
NTAV at
30 September 9,91 26,09 10,77 26,95 171,9 7,42 (72,5)
Notes:
1. The "Before" column is based on TFS" six month interim results to 30
September 2002.
2. The sale of Safrican and TRBGH were assumed to be effective on 1 April 2002
in calculating the pro forma effects on EPS and HEPS. It has been assumed that
the proceeds on disposal earned interest at an average rate of 10,5%.
3. The sale of Safrican and TRBGH were assumed to be effective on 30 September
2002 in calculating the pro forma effects on NAV and NTAV.
4. For purposes of calculating the effect of the initial distribution, it was
assumed the initial distribution was effected on 1 April 2002 for purposes of
EPS and HEPS and 30 September 2002 for purposes of NAV and NTAV.
8. Confirmations, opinions, recommendations and undertakings
TIC is in the process of finalising discussions with its bankers in order to
provide the SRP with the appropriate confirmation that TIC has sufficient
financial resources available to it to settle the sale consideration due in
terms of the sale agreements.
Ernest & Young Corporate Finance (Pty) Limited ("EY Corporate Finance") has
considered the terms and conditions of the TRBGH transaction and is of the
opinion that they are fair and reasonable to the shareholders of TFS, and has
advised the directors of TFS accordingly. Bridge Capital Services (Pty) Limited
("Bridge Capital") has considered the terms and conditions of the Safrican
transaction and is of the opinion that, at the date of issue of its letter, they
are fair and reasonable to the shareholders of TFS, and has advised the
directors of TFS accordingly.
The board of directors of TFS has considered the terms and conditions of the
sales and initial distribution, and based on the respective opinions from EY
Corporate Finance and Bridge Capital, the board of directors of TFS is of the
unanimous opinion that the terms of the sales and initial distribution are fair
and reasonable to shareholders. Accordingly, the board of directors of TFS,
recommends that shareholders vote in favour of all resolutions, which are
necessary to approve and implement the sales, the initial distribution and the
winding-up.
TFH, Rand Merchant Bank, Fabcos Investment Holding Company (Proprietary)
Limited and Morso Investments (Proprietary) Limited, who collectively own 80,4%
of the shareholding in TFS, have irrevocably undertaken to vote in favour of all
of the resolutions, where the nature of the interest in the shares entitles them
to vote, at the general meeting.
9. Salient dates and times
2003
Last day for shareholders to lodge forms of proxy
for the general meeting, by 09:00 on Tuesday, 24 June
General meeting held at 09:00 on Thursday, 26 June
Results of the general meeting and announcement
of the fulfilment of the remaining conditions
precedent, if any, released on SENS on Thursday, 26 June
Results of the general meeting and announcement of
the fulfilment of the remaining conditions
precedent, if any, released in the press on Friday, 27 June
Last day to be registered as shareholders in
order to receive the initial distribution and any
further distributions on Friday, 27 June
Date of payment of the initial distribution
(i.e. Operative Date) on Monday, 30 June
Termination of listing at commencement of trade on Tuesday, 1 July
Notes:
1. The Competition Commission submission was formally filed with the
Competition Commission on Friday, 9 May 2003. The latest possible date for the
receipt of the Competition Commission approval is thus Friday, 8 August 2003.
Although it is anticipated that Competition Commission approval will be received
before the general meeting, in the event of this not being the case the dates
and times following the general meeting may change.
2. Any change to the above dates and times will be published in the press and
released on SENS.
10. Circular
A circular containing full details of the sales, the interim distribution,
the delisting and winding-up of TFS will be despatched to shareholders on or
about Wednesday, 4 June 2003.
Johannesburg
28 May 2003
Investment bank and sponsor
NEDBANK CORPORATE
Attorneys to TFS
WEBBER WENTZEL BOWENS
Independent advisors to the minority shareholders of TFS in respect of the TRBGH
transaction
Ernst & Young Corporate Finance (Pty) Ltd
(Registration number 2000/031575/07)
Reporting accountants
PricewaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants & Auditors
(Registration no. 1998/012055/21)
Independent advisors to the minority shareholders of TFS in respect of the
Safrican transaction
BRIDGE CAPITAL
Date: 28/05/2003 05:54:19 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
