| Fri 7 Oct 2005, 7:48 | | GLENRAND MIB Limited - GLENRAND MIB announces sale |
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GLENRAND MIB Limited - GLENRAND MIB announces sale of reinsurance division
GLENRAND MIB Limited
Share code:GMB
Isin: ZAE000018529
Glenrand M.I.B has announced the sale of its reinsurance arm, Reinsurance
Consultants and Intermediaries (RCI), to Willis Group Holdings Limited (NYSE:
WSH), the global risk management and insurance broking group.
Glenrand M.I.B will receive a cash consideration of R76 million, with further
payments subject to certain performance criteria.
Glenrand M.I.B CEO Steve von Roretz says a decision was taken to sell the
business, which made a R12 million contribution to the group"s bottom line in
the last financial year, because strategically it needed to partner or be part
of an international reinsurance broking group to ensure its further growth and
development.
"Domestic reinsurance brokers need to enhance their intellectual capital and
technical tools through broader exposure, in order to compete with their
international counterparts in the local market.
"We took the view that unless we found a suitable partner with an international
presence for RCI, its growth would be limited. The decision to make this
disposal locks in value for Glenrand M.I.B shareholders and is in the interests
of all stakeholders.
"There is no doubt that RCI will benefit substantially from the linkage to a
global leader in the reinsurance arena."
Reinsurers, who underwrite risks on behalf of insurance and other companies,
typically operate in many countries to ensure geographical risks are spread. The
same is true of reinsurance brokers, who provide advice on reinsurance risks and
the offsetting of those risks.
Von Roretz says the reinsurance broking business has become increasingly
specialised and capital-intensive. "This business is best handled by those firms
with a global presence and the kind of sector specialisation required to offer
clients the best advice and most cost-effective risk solutions."
RCI will be sold as a going concern, along with its assets, contracts, employees
and trade creditors to a new entity. The disposal becomes effective after the
fulfilment or waiver of all suspensive conditions, but not later than 28
February 2006.
RCI"s Iain Macindoe, who will continue to lead the new company as CEO, says, "By
joining such a well-connected international company as Willis, we will be able
to provide clients with immediate access to local and international reinsurance
markets."
RCI offers advice on the placement and purchasing of reinsurance for a host of
clients including insurance companies, underwriting agencies, commercial and
retail outlets, financial service companies and banking institutions.
It places business in the local and international markets and, as a leader in
its field in South Africa, also provides certain of the above services into
Southern Africa.
The disposal is expected, on a pro forma basis, to improve fully diluted
earnings per share by 602% to 30,2 cents but, at the headline earnings level, a
28% decline to 8,5 cents (11,8 cents prior to the transaction) is anticipated.
The transaction is expected to lift net tangible asset value by 51% to 77 cents
(51 cents prior to the transaction).
Ends
ISSUED FOR: GLENRAND M.I.B LIMITED
CONTACT : Steve von Roretz, CEO: 011 329 1427 / 083 326 6319
David Harpur 011 293 2800 / 082 441 4486
FAX NO : 011 293 2755
E-MAIL : svonroretz@glenrandmib.co.za /
dharpur@glenrandmib.co.za
WEBSITE : www.glenrandmib.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart: 011 325 4195 / 082 443 6399
FAX NO : 011 325 4199
E-MAIL : tish@tspr.co.za
DATE : 06 OCTOBER 2005
Date: 07/10/2005 07:48:06 AM Produced by the JSE SENS Department
