| Thu 25 Nov 2004, 17:49 | | DISPOSAL OF INTEREST IN RENTMEESTER ASSURANCE |
|
RENTSURE HOLDINGS LIMITED - DISPOSAL OF INTEREST IN RENTMEESTER ASSURANCE
LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT
RENTSURE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/023539/06)
Share code: RNT ISIN: ZAE000012811
(`Rentsure` or `the company`)
DISPOSAL OF INTEREST IN RENTMEESTER ASSURANCE LIMITED AND FURTHER CAUTIONARY
ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement dated 18 October 2004, shareholders are
notified that Rentsure has entered into an agreement with Capital Alliance Life
Limited (`the purchaser`), relating to the disposal of the company`s 70%
interest in Rentmeester Assurance Limited (`Rentmeester`) (`the transaction`).
2. Terms of the transaction
2.1 Disposal consideration
Rentsure will dispose of its 70% interest in Rentmeester to the purchaser for a
cash consideration of R8 400 000, reduced by any amount owing by Rentsure to
Rentmeester as at the effective date (`the Rentsure loan`), being the last day
of the month during which the last of the suspensive conditions set out under
2.5 below has been fulfilled or waived (`the disposal consideration`).
The purchaser will also pay an amount of R20 000 000 into an escrow account,
70% of which will be paid to Rentsure on 15 June 2005, together with interest
thereon, if there are no adjustments in respect of certain of Rentmeester`s
assets.
Rentekor (Pty) Limited (`Rentekor`), Rentsure`s controlling shareholder, owns
the remaining 30% in Rentmeester and has, in terms of the agreement referred to
above, agreed to sell its 30% interest in Rentmeester to the purchaser on pro
rata the same terms and conditions.
Rentsure and Rentekor are hereinafter collectively referred to as `the
sellers`.
2.2 Alnet (Pty) Limited (`Alnet`)
Alnet is a wholly-owned subsidiary of Rentmeester. Rentmeester is in the
process of negotiating the disposal of Alnet.
2.3 Warranties
The sellers have given warranties, normal for a transaction of this nature, to
the purchaser.
2.4 Rationale for the transaction
Given the continued pressures being experienced by smaller life offices and the
sellers` limited ability to further capitalise Rentmeester, the Board of
Rentsure believes the transaction to be in the best interests of the
policyholders, shareholders and business associates of Rentmeester. The
purchaser is fully capable of meeting the ongoing capital and operational
requirements that are part and parcel of owning a life office.
2.5 Suspensive and resolutive conditions
The transaction is subject to, inter alia, the fulfilment of the following
suspensive conditions:
* the approval and/or consent of the Registrar of Long-term Insurance by 31
January 2005;
* the approval of the relevant Competition authority by 28 February 2005;
* the approval of the JSE Securities Exchange South Africa (`JSE`) and the
Securities Regulation Panel (`SRP`) of the circular to be issued to Rentsure
shareholders for the purpose of the transaction by 31 January 2005; and
* Rentsure and Rentekor, respectively, obtaining irrevocable undertakings by 30
November 2004 from such number of shareholders so as to ensure the transaction
is approved at their respective general meetings of shareholders.
In addition to the suspensive conditions listed above, the transaction is
subject to the following resolutive condition:
* approval by the shareholders of Rentsure and Rentekor, respectively, by 28
February 2005.
3. Independent advice
The transaction qualifies as an `affected transaction` in terms of the rules of
the Securities Regulation Code on Take-overs and Mergers (`the Code`). The Code
requires the directors of Rentsure to obtain independent advice on the fairness
and reasonableness of the transaction, and the directors of Rentsure will
appoint a suitable independent expert in this regard. The content of such
independent expert`s opinion will be included in the circular to be mailed to
shareholders, as discussed below.
4. Orderly winding-up of the company
Following the disposal of the company`s major asset, and subject to shareholder
approval, it is the directors` intention to proceed with the orderly winding up
of the company by means of a members` voluntary liquidation. It is the company`s
intention to distribute the disposal consideration to shareholders in the course
of the winding-up process. Shareholders will be timeously informed of further
developments in the winding-up process.
5. Documentation and further cautionary announcement
A circular, which is subject to the approval of the JSE and SRP, will be sent
to shareholders in due course. The circular will contain details of the
transaction, the winding-up process and the independent expert`s opinion, and
will incorporate a notice of general meeting of Rentsure shareholders.
As the financial effects of the transaction have not yet been disclosed,
shareholders are advised to continue to exercise caution when dealing in their
Rentsure shares until such time as the financial effects have been disclosed.
Pretoria
25 November 2004
Corporate advisor
Bravura Corporate Advisory Services
Sponsor
BRIDGE CAPITAL
Legal advisor
Rooth & Wessels Inc
