| Wed 26 Jan 2005, 12:13 | | Coronation - Company Announcement |
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Coronation - Company Announcement
Coronation Fund Managers Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1973/009318/06)
ISIN: ZAE000047353
JSE Share code: CML
(`Coronation` or `the Company`)
Broad-based BEE staff transaction
- Legal agreements;
- Distribution to shareholders;
- Financial effects; and
- Withdrawal of cautionary announcement
Introduction
Shareholders are referred to the detailed cautionary announcement dated 30
November 2004 regarding Coronation`s proposed broad-based BEE transaction (`the
Transaction`) in terms of which the Imvula Trust (`the Trust`) will acquire 10%
of Coronation Investment Management (Proprietary) Limited (`CIM`), the holding
company of Coronation`s South African and international operating subsidiaries.
CIM is wholly owned by Coronation.
Coronation is pleased to announce that third-party funding for the transaction
has been secured and that all relevant agreements are being finalised.
The implementation of the Transaction in respect of Coronation`s international
subsidiaries remains subject to approvals from the relevant regulatory
authorities, namely the Financial Services Authority in the United Kingdom and
the Irish Financial Services Regulatory Authority in Ireland.
The transaction
Shareholders are advised that the structure as announced on 30 November 2004
remains materially unchanged. A company owned by the Trust will raise R147
million through the issue of preference shares to a third-party financier. The
name of this company has changed from Imvula Empowerment Company (as reported in
the abovementioned detailed cautionary announcement) to Imvula Capital. Imvula
Capital will advance the funds to the Trust, which will acquire 10% of CIM`s
ordinary share capital. The acquisition consideration corresponds to a
Coronation listed share price of 385 cents per share.
The Trust`s board of trustees comprises two independent trustees, Kabelo Dlothi
and Taswell Papier, and Thys du Toit, the chief executive officer of Coronation.
The final selection of the beneficiaries of the Trust and the allocations to
those beneficiaries will be determined by the Trust`s board of trustees, based
on recommendations from Coronation`s board of directors. In making allocations
to Coronation`s black staff, account will be taken of the management bands as
envisaged in the Financial Sector Charter.
The effective date of the Transaction is 31 December 2004.
Legal agreements
All requisite legal agreements relating to the Transaction, including the
financing agreements between the relevant parties and a third-party financier,
are in the process of being finalised.
Distribution to shareholders
Arising from the Transaction, the Company proposes distributing an amount of 25
cents per Coronation share to shareholders, comprising a return of share premium
of 24 cents per share and a dividend of 1 cent per share, subject to shareholder
approval.
Financial effects
The Transaction will contribute strongly to broad-based black economic
empowerment and the transformation of the Company and should result in long-term
benefits to the business.
The following table has been prepared for illustrative purposes only and sets
out the pro forma financial effects of the Transaction on a Coronation
shareholder, based on the assumptions set out below:
Actual Pro forma Change
`Before` `After` (%)
(Note 1) (Note 2)
Earnings per share (cents)
Basic 32.8 29.7 -9
Diluted 32.5 26.5 -18
Headline earnings per share (cents)
Basic 33.9 30.8 -9
Diluted 33.5 27.4 -18
Net asset value per share (cents) 59.0 30.8 -48
Notes:
1. The `Before` financial information has been extracted, without adjustment,
from the audited consolidated financial results of the Company and its
subsidiaries for the year ended 30 September 2004.
2. The pro forma `After` information comprises the `Before` information
adjusted for the following:
- the receipt by the Company of R147 million, comprising the proceeds of th
Transaction, as though the amount had been received on 1 October 2003;
- the payment by the Company of R95.6 million to shareholders, by way of a
reduction of the share premium account of 24 cents per share and a dividend of 1
cent per share, as though the payment had been made on 1 October 2003;
- the investment by the Company of R51.1 million in an interest-bearing
account, at an after-tax rate of 4%, as though the investment had been made on 1
October 2003.
3. Diluted earnings per share has been calculated on the assumption that the CIM
shares acquired by the Trust covert to Coronation shares on a 1:1 basis.
Shareholder approval
Shareholders are referred to the ordinary resolution included in the Company`s
notice of annual general meeting providing Coronation`s directors with specific
authority to issue shares in the event that Coronation exercises its option to
purchase the CIM shares from the Trust in exchange for Coronation shares of
corresponding value. The Company`s annual general meeting is to be held on
Wednesday, 5 February 2005, at 10h00.
Opinions and recommendations
The directors of Coronation have considered the terms and conditions of the
Transaction and are of the opinion that the Transaction should provide lasting
benefits for Coronation`s shareholders, clients, business partners and staff.
Members of the board who beneficially own and/or control Coronation shares
intend to vote in favour of the resolution referred to above.
Withdrawal of cautionary announcement
Shareholders are advised that they are no longer required to exercise caution
when dealing in the Company`s securities.
Gavan Ryan Thys du Toit Derek McDonald
Chairman Chief Executive Officer Company Secretary
Cape Town
26 January 2005
Sponsor
Deutsche Securities (SA) (Pty) Ltd
Date: 26/01/2005 11:35:13 AM
Produced by the JSE SENS Department
