| Tue 13 Sep 2005, 16:06 | | Discovery Holdings Limited - Discovery Brings In S |
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Discovery Holdings Limited - Discovery Brings In Strategic Empowerment Partners
DISCOVERY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
ISIN: ZAE000022331
Share Code: DSY
DISCOVERY BRINGS IN STRATEGIC EMPOWERMENT PARTNERS
Discovery Holdings today announced the conclusion of a strategic black economic
empowerment (BEE) transaction to achieve three objectives: empower employees
through the transfer of shares; make a significant contribution to the
development of human capital mainly in the health care sector through the
creation of the Discovery Foundation and achieve broad based empowerment of
historically disadvantaged people through our partnership with the WDB
Investment Holdings (WDB).
In total, the new shareholders represent approximately 7% of Discovery Holdings`
equity. This will bring Discovery`s total BEE shareholding, after accounting for
the BEE shareholding in FirstRand, to just over 25%. This is in line with the
requirements of the Financial Services Charter.
Discovery employees will receive a total of 5 390 000 shares in Discovery which
will vest in varying periods, depending on employees` level of seniority,
commencing in two years time
`We value people as our greatest asset, and we want to reward the contribution
of our employees and recognize and encourage the contribution of black talent
within Discovery,` says Adrian Gore, CEO of Discovery
`Further, we want to achieve true broad-based empowerment and we want to be
involved with innovative and entrepreneurial partners who can contribute to
Discovery`s growth,` Gore says. At least 3% of Discovery`s shareholding will
rest with WDB Investment Holdings (WDB), the investment arm of the group which
generates income to be ploughed into the economic empowerment and upliftment of
black rural-based women.
`WDB is a shareholder with an institutional perspective, providing strategic
guidance whilst acknowledging that operational issues rest in the hands of the
Discovery management team,` he says. WDB is also an entrepreneurial entity that
understands that its investment in Discovery is for the long haul.
`Also WDB has insight into the social issues which are facing our sector. They
bring to Discovery this unique experience,` Gore says.
Gore adds that WDBIH offers Discovery the broad-based ownership that it desires,
particularly with its emphasis on the upliftment of rural women.
WDB Executive Director, Sonja Sebotsa, who has been nominated to serve as a non-
executive member of the Discovery board, says: ``WDB is very pleased to partner
with a market leader such as Discovery. We look forward to working with
Discovery`s management team as they unlock further growth in South Africa and
offshore including exploring growth opportunities in the lower income segments
of our population.`
The BEE deal will also see the formation of The Discovery Foundation to invest
in the education and training of black medical specialists in areas of need.
The intention is to have focused and significant impact in an area of critical
need in the heath sector. The Foundation will be capitalised through a
combination of Discovery shares and initial operating capital, giving it access
to between R100 million and R200 million over a period of ten years.
Prominent businessman, Dr Vincent Maphai, who is chairman of BHP Billiton South
Africa, will chair the Discovery Foundation and become a shareholder. He has
been nominated to join Discovery`s board as non-executive director.
Maphai said: `Discovery is a very successful company. It has the guts to
change the rules of the game, has a strong management team and an unyielding
desire to win. I respect the company and its leadership enormously. I am proud
to be joining such a company.`
`We, WDBIH and I, are here to supplement each other with the leadership of this
company. We are not here to replace each other. I am looking forward to that,`
he adds.
Gore says Dr Maphai will add considerable gravitas and experience to the
Discovery board and as a shareholder. `Vincent`s statesmanlike skills and
experience will add considerably to Discovery`s skill base,` says Gore.
Gore says the decision to structure the shareholding in this way, and partner
with WDBIH as its institutional BEE shareholder followed a rigorous process of
selection.
Importantly, the entire transaction will be at Holdings level, rather than at
subsidiary level. This, says Gore, will mean that the empowerment shareholders
will share in the full upside and risk of Discovery, and aligns all
shareholders.
`We feel this is a cleaner way of putting together a BEE deal,` says Gore. `Our
businesses are closely integrated, and in this way our BEE partners share the
risk as well as the upside in all of our operations, including in the US and
UK.`
Gore says however that the shareholding issue is only one aspect of Discovery`s
transformation drive: `Discovery has made significant progress in meeting the
other aspects of the Financial Services Charter, including employment equity and
procurement,` he says.
Notes to editors:
Discovery`s BEE transaction is driven by three guiding principles:
The empowerment of Discovery`s people is an important component of the
transaction, giving each Discovery employee shares in the company.
The Discovery Foundation aims to bring about a significant change in the health
care sector by investing in the education and training of black medical
specialists in areas of need. The Foundation will be capitalised through a
combination of Discovery shares and initial operating capital, giving it access
of between R100-millon to R200 million over a period of ten years. Through
investments in scholarships, bursaries and research fellowships, as well as
through activities that provide direct support for teaching and research
institutions involved in the training of medical specialists, the Foundation
will increase significantly the number of specialists in South Africa.
Importantly, all of these specialists will be previously disadvantaged
individuals. Another important component of the Foundations` activities will be
an investment in the training of black actuaries to the benefit of the South
African insurance and health care environment.
Broad based empowerment in partnership with the WDB Investment Holdings: The
Women`s Development Bank Investment Holdings is an organisation that promotes
the upliftment and development of women, specifically by investing in the micro
business ventures of rural women. In terms of the empowerment transaction 3% of
our shareholding will rest with WDB Investment Holdings (WDBIH), the investment
arm of the group which generates income to be ploughed into the economic
empowerment and upliftment of women. WDBIH is a long-standing BEE investment
company, and brings with it an institutional framework and commercial expertise,
enabling it to meaningfully participate in Discovery as a shareholder.
Profile of Discovery`s partners
The Women`s Development Bank Group encourages the upliftment of rural
communities by developing woman entrepreneurs at grassroots level. They have a
proven 13-year track record of support to women in South Africa`s poorest
communities and through their micro-finance programme, have supported more than
8 000 micro enterprises with loans to the value of more than R30-million. Sonja
Sebotsa, executive director of WDBIH, has been nominated to be appointed to the
Discovery board as a non-executive director. She has a wealth of experience in
investment and corporate finance issues and since 2002 has been responsible for
investment transactions and investee relationships at the WDBIH. She holds a
number of prestigious directorships and is the chairman of the audit committee
at Adcorp.
As the Chairman of the Discovery Foundation, a shareholder and new nominee non-
executive Discovery board member, Dr Vincent Maphai, brings to Discovery his
outstanding business acumen and a unique insight into the issues of
transformation in the business environment. After a long and illustrious career
as an academic, chairman of the Presidential Review Commission on the
restructuring of the public sector, former executive director of the HSRC,
director of corporate affairs at SAB and chairman of the SABC board, Dr Maphai
is currently the chairman of BHPBilliton SA.
(Ends)
Issued by:
Beachhead Media & Investor Relations
(Lynette Lambert) tel no: 011 214 2406/084 580 2402/ lynette@bmsa.co.za
(Rio Matlhaku) tel no: 011 214 2402/082 907 7943/rio@bmsa.co.za
(Sheri Fine) tel no: 011 214 2414/082 785 6164/sheri@bmsa.co.za
On behalf of:
Adrian Gore
CEO, Discovery Holdings Limited
011 529 2800 / 082 606 2800
Dr Vincent Maphai
Tel: 012 460 6863/Cell no: 082 788 2500/email: Maphai@worldonline.co.za
Ms Sonia Sebotsa
Executive Director
WDB Investment Holdings (Pty) Ltd
Tel: (011) 341 9900/cell no: 082 372 1704/email: sonjas@wdbih.co.za
Date: 13/09/2005 11:23:05 AM
Produced by the JSE SENS Department
