| Fri 19 Nov 2004, 11:40 | | DECILION LIMITED - SIGNS MOU WITH EMPOWERMENT PART |
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DECILION LIMITED - SIGNS MOU WITH EMPOWERMENT PARTNER
DECILION LIMITED
SHARE CODE: DEC
ISIN: ZAE000017612
PRESS RELEASE
DECILLION SIGNS MOU WITH EMPOWERMENT PARTNER
Johannesburg, 19 November 2004
Decillion, the JSE-listed niche financial services company, announced today that
it is entering into a black economic empowerment partnership with a consortium
headed by Prof Wiseman Nkuhlu, former economic advisor to President Mbeki.
Nkuhlu`s African General Equity (AGE) Consortium has reached an agreement to buy
60% of Decillion Capital, Decillion`s local operating subsidiary housing the
capital market operations and the unlisted investment banking arm of the
Decillion group, subject to certain conditions precedent.
Decillion issued a cautionary notice to shareholders today, advising them that
the AGE Consortium and Decillion Capital had signed a Memorandum of
Understanding in terms of which the Consortium would acquire a controlling stake
in Decillion Capital.
Johannesburg-based Decillion Capital is the largest of the group`s three
operating divisions. The transaction excludes the hedge funds business centred
in Cape Town and the international broking arm operating out of London and Nyon
in Switzerland, as well as the proprietary trading portfolios of Decillion
Capital.
`Rather than taking a minority stake in the group, AGE decided it would be more
beneficial to acquire a majority stake in a main subsidiary of the group and
help determine the future strategy of the local operations,` Nkuhlu said.
`The fact that we will be taking a controlling position, which is almost
unprecedented in black empowerment deals, means that we will from the start be
in a position to direct the company.`
`We believe that where we can add value is in project finance and fixed income
services to the public sector in particular, and in advisory services to BE
companies and other corporate clients.`
Decillion group CEO Alwyn Smit said he was delighted to be gaining an
empowerment partner of the stature of Professor Nkuhlu and the financial
services skills his consortium would contribute.
`The transaction will transform Decillion Capital into a black financial
services company beyond the requirements of the Financial Sector Charter, and
will substantially broaden the company`s opportunities for the provision of
treasury management and debt origination services.`
Nkuhlu will become executive chairman of Decillion Capital, while Smit, the
Group CEO of Decillion Limited, will become deputy chairman. Trevor Davis and
Marius Mostert will stay on as managing director and financial director,
respectively, of Decillion Capital. Both are also directors of Decillion
Limited. Reggie Naidoo, an AGE executive, also joins the Decillion Capital board
as an executive director.
Nkuhlu will operate from the Decillion offices and will devote a significant
portion of his time to the business.
Smit noted that the proposed deal would bring together two financial services
partners who had worked together closely for some time.
`Reggie Naidoo was joint MD of Decillion Capital before he left to set up AGE
and AGE Treasury Services. We helped set AGE on its feet and the two companies
have maintained a business relationship. We look forward to having Reggie back
at Decillion Capital as an executive director. `
Nkuhlu is the largest single shareholder in AGE. He is a chartered accountant by
profession, and was President of the South African Institute of Chartered
Accountants (SAICA) where he served a two-year term. Nkuhlu was Chairman of The
Development Bank of Southern Africa for seven years and has served on the boards
of African Bank, Standard Bank, Old Mutual, and several other blue chip
companies. He is currently the chairman of the steering committee of the New
Partnership for Africa`s Development (NEPAD).
Other directors of AGE include Naidoo, Lwazi Koyana, also a chartered
accountant, and Gideon Sam, President of the Sports Commission.
Smit said that `Subject to JSE approval, a circular will be sent to
shareholders with full details of the proposed transaction and convening a
general meeting of shareholders to approve the transaction. This will be done
once definitive terms of the transaction and its financial effects are known.`
The transaction is subject to suspensive conditions, including approval by
shareholders and by the relevant regulatory authorities. The effective date will
be on fulfilment of the suspensive conditions, which is expected to be no later
than 1 March 2005.
For further information, please contact:
Prof. Wiseman Nkuhlu, Tel 011 313 3672 or 083 259 7932
Trevor Davis, MD Decillion Capital, Tel 011 217 9000 or 082 610 5754
Date: 19/11/2004 11:02:34 AM
Produced by the JSE SENS Department
