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FirstRand - Issue And Listing Of Additional Ordinary Shares
FirstRand Limited
Reg. No: 1966/010753/06
Share Code: FSR
ISIN Code: ZAE000014973
(`FirstRand` or the `Company`)
ISSUE AND LISTING OF ADDITIONAL ORDINARY SHARES AND DISCLOSURE OF DIRECTORS`
INTEREST
Rand Merchant Bank is authorised to announce that FirstRand has issued a further
16 053 803 ordinary shares to participants under the FirstRand Out-performance
Share Incentive Scheme (the `Out-performance scheme` or the `Scheme`).
Application has been made to The JSE Securities Exchange, South Africa (the
`JSE`) to authorise the listing of the additional 16 053 803 ordinary shares in
the capital of FirstRand with effect from 30 June 2004, or as soon as is
practical thereafter.
These new FirstRand ordinary shares arise from the conversion of variable rate
convertible redeemable preference shares previously issued by the Company to
selected staff members under the Out-performance scheme. The rules of the Out-
performance scheme were approved by FirstRand`s shareholders and are
incorporated in its Articles of Association. Under the Scheme, 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. This 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.
For this particular tranche of preference shares falling due for conversion
under the provisions of the Scheme, the performance measurement period was from
the end of June 1999 to the end of December 2003.
- In this volatile period, the weighted average FirstRand share price
increased by 34,3% while the Fini 15 index declined by 2,5%.
- FirstRand`s market capitalisation at the end of December 2003 amounted
to R47,6bn.
- In the context of FirstRand`s market capitalisation, the out-
performance value that was created and / or preserved (relative to FirstRand`s
Fini 15 peers) amounted to some R15,4bn.
- Of this value, approximately 1,0% accrued to the participants and
resulted in 16,1m incentive shares being awarded to them.
It is these incentive shares that are now being listed on the JSE Securities
Exchange.
Financial Impact
Taken in isolation, this issue of the new FirstRand ordinary shares to staff
members has a dilution effect on existing FirstRand shareholders.
Assuming that the additional ordinary shares had been in issue for the full six
months ended 31 December 2003 (FirstRand`s last financial reporting period) the
impact of the transaction may be extrapolated as follows:
Before After Change
Headline Earnings Per Share 51,04c 50,89c -0,29%
Net Asset Value Per Share 447,15c 445,84c -0,29%
Both in absolute terms and in the context of the shareholder value that was
created and / or preserved by the FirstRand group 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 this tranche of the Out-
performance scheme is gratifying and goes some way in rewarding the superior
value delivered to shareholders by the group`s management team. The remaining
tranches of the scheme should continue to provide FirstRand with a powerful tool
with which to retain and motivate its key staff members.
Disclosure of Directors` Interest
In compliance with rule 3.63 of the JSE Listing requirements the following
information is disclosed for Directors who are participants under this tranche
of the Out-performance Scheme:
Director: L L P K Harris V W JP Burger
Dippenaar Bartlett
Company: FirstRand FirstRand FirstRand FirstRand Bank
Holdings Ltd, a
major subsidiary of
FirstRand
Nature of Indirect Indirect Indirect Indirect Beneficial
interest: Beneficial Beneficial Beneficial
Date of 30 June 2004 30 June 30 June 30 June 2004
conversion: 2004 2004
Number of 285 833 285 833 214 375 214 375
ordinary
shares
awarded on
conversion:
Value of R2 915 497 R2 915 497 R2 186 625 R2 186 625
transaction:
Clearance Yes Yes Yes Yes
obtained:
Sandton
30June 2004
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
Date: 30/06/2004 05:10:03 PM Produced by the JSE SENS Department
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