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SEKUNJALO INVESTMENTS LIMITED - ACQUISITION OF BONBEN ASSURANCE LIMITED AND
BENMED MEDICAL SCHEME ADMINISTRATORS (PTY) LIMITED
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/006093/06)
Share code: SKJ ISIN: ZAE000017893
(`Sekunjalo` or `the company`)
ACQUISITION OF BONBEN ASSURANCE LIMITED (`BONLIFE`) AND BENMED MEDICAL SCHEME
ADMINISTRATORS (PROPRIETARY) LIMITED (`BENMED`)
1. Introduction
Shareholders are advised that Sekunjalo has entered into a letter of
understanding with Bensure Management Services (Proprietary) Limited to acquire
60% of the entire issued share capital of Bonlife and 60% of the entire issued
share capital of Benmed (`the acquisitions`). Sekunjalo has an option to acquire
a further 10% of Bonlife and Benmed respectively from Maximus Productions
(Proprietary) Limited which will be exercised on 1 January 2005 (`the effective
date`), following which Sekunjalo will hold 70% of Bonlife and Benmed
respectively. Upon fulfilment of the conditions precedent referred to in
paragraph 6 below, the acquisitions will be effective from the effective date.
2. Nature of business
Bonlife is a life assurance underwriting company and Benmed, a medical scheme
administrator.
3. Rationale
Sekunjalo, as a black economic empowerment group, would like to position itself
to provide health care and financial solutions to the poor and emerging black
middle-class South Africans.
Sekunjalo intends to provide products that are affordable, socially relevant and
aligned with the strategic thrust of government policy and the acquisitions
place Sekunjalo in a position to participate as a partner in government`s
proposed state health insurance fund.
4. Consideration
The consideration payable by Sekunjalo for the acquisitions including the
exercise of the aforementioned option is R9.1 million. The consideration will
be settled through the issue of 15 166 667 Sekunjalo shares at 60 cents per
share.
5. Financial effects
Based on the published unaudited interim results of Sekunjalo for the 6 months
ended 29 February 2004, the pro forma financial effects of the acquisitions on
Sekunjalo`s earnings, headline earnings, net asset value (`NAV`) and tangible
NAV are set out below. The pro forma financial information has been prepared for
illustrative purposes only and because of its nature may not give a true picture
of Sekunjalo`s financial position and results of operations.
Per Sekunjalo Before the After the Percentage
ordinary share acquisition acquisition Change
s (1) s (2) %
Earnings (cents) 630 692(3) 9,8
Headline earnings 150 198(3) 32,2
(cents)
NAV (cents) 47,2 48,0(4) 1,6
Tangible NAV (cents) 42,0 44,2(4) 5,3
Notes:
1. Based on the published unaudited interim results of Sekunjalo for the 6
months ended 29 February 2004.
2. Based on the assumption that the acquisitions were effected on 1 September
2003 for income statement purposes and on 29 February 2004 for balance sheet
purposes and assuming that Sekunjalo has paid the consideration of R9.1 million.
3. Taking into account Sekunjalo`s effective 70% share of the profits
attributable to Bonlife and Benmed for the six month period ended 29 February
2004.
4. For the purpose of the pro forma NAV and NTAV calculation, Sekunjalo has
conservatively valued the licences, goodwill and operating systems of the
acquisitions at R13 million.
6. Conditions precedent
The acquisitions are subject to the fulfilment of, inter alia, any necessary
approvals and procedures required by the various regulating authorities
requiring their approval.
Cape Town
3 November 2004
Sponsor
Nedbank Capital
Date: 03/11/2004 12:04:06 PM
Produced by the JSE SENS Department
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