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VENFIN LIMITED - ANNOUNCEMENT REGARDING INTERVID LIMITED
VENFIN LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1948/031037/06)
Share Code: VNF
ISIN: ZAE000026498
("VenFin")
Announcement regarding Intervid Limited
VenFin refers shareholders to the announcements released on Friday 30 January
2004 and 4 February 2004 by Intervid Limited ("Intervid"). VenFin has an equity
interest of approximately 17% and a further indirect investment in Intervid
International AG through a convertible bond held by RFS Holdings Limited ("RFS
Holdings"), which is an associate of VenFin.
The first announcement recorded that Intervid had received notice from certain
of its shareholders, referred to as "the Howard family", in terms of Section 220
of the Companies Act No 61 of 1973, as amended, proposing the removal of the
independent chairman of Intervid and the appointment of three non-executive
directors ("the proposal").
The second announcement by Intervid contained the views and recommendation of
the majority of the board of Intervid ("the majority recommendation"). The
majority recommendation was that shareholders vote against the proposal, for
various reasons including concerns regarding governance, the disruption to the
turnaround currently being effected by the new management and the threat that
the proposal may have to Intervid"s future financial requirements. It should be
noted that VenFin is not represented on the Board of Intervid.
The second announcement also contains various references to and assertions about
VenFin. These include:
- reference to negotiations that are currently underway with RFS Holdings,
regarding limiting the conversion rights provided in the convertible bond to 65%
of Intervid"s issued share capital;
- references to efforts by Intervid to obtain an underwriter for a possible
rights issue and to VenFin"s offer to act as an underwriter to a rights issue;
and
- the assertion that VenFin is opposed to changes to the board of Intervid,
including the removal of the independent non-executive chairman, Mr Bill
Lambert.
The majority recommendation includes the views that:
- support from VenFin and RFS Holdings is important for the future of Intervid
until the turnaround process fully translates into sustainable financial
delivery;
- the majority of the board is not aware of any other prospective financing
arrangements in the event that VenFin, RFS Holdings or Intervid"s bankers react
unfavourably to the proposal.
Intervid published a cautionary announcement on 9 January 2003 regarding a
potential recapitalisation of Intervid. VenFin records that it is concerned
about the developments at Intervid. To date, the Howard family has not put
forward proposals regarding Intervid"s future financing requirements and their
proposal to restructure the Intervid Board has, in VenFin"s view, created some
uncertainty over Intervid"s future.
As such, VenFin is strongly opposed to the proposal put forward by the Howard
family to restructure the Intervid Board. VenFin broadly agrees with the views
expressed in the majority recommendation. Should the Howard family not shortly
propose a viable and acceptable alternative solution to Intervid"s future
financing requirements, VenFin will have to reconsider its position in
Intervid.
VenFin will in the interim take all necessary steps to protect its investment in
Intervid, even though this investment represents a very small proportion of
VenFin"s portfolio of investments.
Stellenbosch
5 February 2004
Financial Adviser
Cazenove South Africa (Pty) Limited
Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited) Corporate Finance
Attorneys
Hofmeyr Herbstein & Gihwala Inc.
Date: 05/02/2004 01:12:03 PM Produced by the JSE SENS Department
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