| Thu 19 Jun 2003, 15:22 | | Kunene Defers Exercise Of Share Option In Glenrand |
|
Glenrand M.I.B Limited-
Glenrand M.I.B Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/008001/06)
Share Code: GMB ISIN: ZAE000018529
("Glenrand M.I.B ")
In the face of share price weakness at risk management and financial services
group Glenrand M.I.B. (Glenmib), its empowerment partner Kunene Bros Investment
Trust has decided not to exercise at this time its option to acquire a further
3.1% stake in the company.
Kunene Bros already holds a 6.2% stake in Glenmib in terms of an agreement
reached in September 2000 outlining Kunene Bros" intention to acquire 10% of
Glenmib in three tranches of a third each.
The agreement gave Kunene Bros the option to convert 22,1-million convertible
redeemable preference shares into Glenmib ordinary shares at a 20% discount to
the weighted average share price for the 30 days preceding the deal, subject to
a minimum conversion price. In May 2002 it exercised the option to convert 14,7-
million preference shares, and Glenmib issued Kunene Bros an equivalent number
of ordinary shares to accommodate the conversion.
The remaining tranche of 7,37-million preference shares was to have been
converted to ordinary shares between 1 March and 31 May 2003, but during that
time two factors temporarily depressed Glenmib"s share price, says chief
executive David Harpur.
"Generally, the JSE was down over the period. On top of that, we published a
trading update announcing that non-performance at two of our divisions meant we
no longer expected to meet our original profit forecast. This had a precipitous,
though temporary, impact on our share price. Though it has since recovered, it
has not reached the minimum conversion price of the agreement."
Glenmib"s share price has recovered from a low of 170c in the wake of the
trading update, to its current level of 204c (18 June 2003). The minimum
conversion price on the Kunene Bros option is 215c.
"This means Kunene Bros could not take full advantage of the 20% discount, and
it would not make economic sense for them to proceed with conversion. The strike
price was inserted to protect our shareholders from just such a weak market,"
says Harpur.
Kunene Bros has requested that the option for the conversion be renewed so as to
allow it to acquire the third tranche between 1 March 2004 and 31 May 2004 on
the same basis as under the original agreement.
"We have taken this request under consideration, and will put it to our
shareholders at our next general meeting," says Harpur. "Both parties remain
committed to the relationship and to achieving appropriate black economic
empowerment credentials."
Should it exercise this right, its stake in Glenmib will rise to roughly 9.3%.
The eight-year relationship between the two groups remains as strong as ever,
having commenced with the formation in 1995 of joint venture company, Kunene
Glenrand.
Kunene Bros takes an active management role in its investments, including
membership of corporate and operating boards and executive, audit and
remuneration committees. Dr Dudu Kunene joined the board of Glenmib in 2000 as
an executive director to assist in shaping the strategic direction of the group
and its transformation. Dr Kunene is chairman of Glenrand M.I.B Makgulong (Pty)
Limited, the group"s empowerment company, as well as the group"s diversity
committee.
ends
ISSUED FOR : GLENRAND M.I.B. LIMITED
CONTACT : David Harpur 011 293 2800 Cell: 082 441 4486
FAX NO : 011 293 2155
E-MAIL : dharpur@glenrandmib.co.za
WEBSITE : www.glenrandmib.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart (011) 325 4195 Cell: 082 443 6399
FAX NO : (011) 325 4199
E-MAIL : tish@tspr.co.za
DATE : 19 June 2003
Date: 19/06/2003 12:27:04 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
