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Mvela Group - Disposal Of The Business Of Jic Mining Services (2000)
(Proprietary) Limited
Mvelaphanda Group Limited
(Formerly Rebserve Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1995/004153/06)
Share code: MVG
ISIN: ZAE000060737
(`Mvela Group` or `the company`)
PRESS ANNOUNCEMENT
DISPOSAL OF THE BUSINESS OF JIC MINING SERVICES (2000) (PROPRIETARY) LIMITED
Mvela Group announces that its wholly-owned subsidiary, JIC Mining Services
(2000) (Proprietary) Limited (`JIC`), has concluded an agreement to dispose of
the business of JIC (`the JIC business`) to a consortium comprising certain
members of the senior management of JIC and a trust (`the BEE trust`) to be
formed, the beneficiaries of which BEE trust will be the previously
disadvantaged employees of JIC (`the JIC disposal`). The BEE trust will own a
minimum 25% effective interest in the JIC business. The JIC disposal remains
subject to the fulfillment of certain suspensive conditions, primarily the
granting of Competition Authorities approval.
At the time of announcing its interim results for the six months ended 31
December 2004, Mvela Group indicated that its strategy would entail the
transformation of the company from a group focused purely on operations, to a
diversified holding company which includes cash generative operating businesses.
In pursuit of this strategy, Mvela Group will identify ways to realise the
inherent value of certain of its investments and operations, which might include
disposing of certain of its operating businesses and/or investments, where
appropriate, over time. In line with this strategy, Mvela Group has also
recently disposed of its effective interests in Apex Hi Manco Trust and Storage
Technology Services (Proprietary) Limited, and is at an advanced stage of
negotiations to dispose of its effective interests in Rewards Company
(Proprietary) Limited and Arcus Gibb Holdings (Proprietary) Limited.
Trading conditions in the mining industry over the past few years have
deteriorated significantly, especially for businesses in the outsourced mining
services sector, and in an environment of a strong Rand versus US Dollar
exchange rate, prospects for a recovery in this sector in the foreseeable future
are remote. Mvela Group has a material exposure to quality assets in the mining
and resources sector through its investment in Mvelaphanda Resources Limited,
which remains a key strategic investment for Mvela Group. The board of Mvela
Group believes however that it would be prudent for Mvela Group to reduce its
exposure to the outsourced mining services sector by disposing of certain of it
assets in this sector, where such opportunities exist and where the inherent
value which can be realised from such a disposal is likely to exceed the future
profit potential of the particular asset and/or increase shareholder value. It
is considered that the JIC disposal will achieve these objectives.
While the JIC business will be disposed of as a going concern, JIC will retain
certain of the assets of the JIC business, primarily the trade receivables, and
certain of the trade creditors, and will realise these in the ordinary course.
Mvela Group will continue to provide working capital finance to the JIC business
under its new owners, within agreed parameters.
Sandton
24 June 2005
Executive Directors: TMG Sexwale (Chairman), MSM Xayiya (Deputy Chairman), SM
Levenberg (Chief Executive), YZ Cuba, V Mavimbela, PJA Mphafudi, BC Till, MJ
Willcox
Non-Executive Directors: KD Dlamini, BD Hopkins, OA Mabandla, D Moshapalo, JRT
Moxon, MZ Nxumalo, RM Patel, CD Stein
Registered Office: Hunts End, 36 Wierda Road West, Wierda Valley, Sandton, 2196
Telephone 27 11 290-4200 Telefax 27 11 783-0027
Sponsor: Deutsche Securities SA (Pty) Ltd
Date: 24/06/2005 03:54:00 PM
Produced by the JSE SENS Department
