| Mon 12 Dec 2005, 14:19 | | Sasfin Holdings Limited - Announcement |
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Sasfin Holdings Limited - Announcement
SASFIN HOLDINGS LIMITED
(Incorporated In The Republic Of South Africa)
(Registration Number 1987/002097/06)
("Sasfin" or "the Company")
Ordinary share code: SFN ISIN: ZAE000006565
Preference share code: SFNP ISIN: ZAE000060273
* ACQUISITION OF A 10% SHAREHOLDING IN SASFIN BANK LIMITED BY INNOVENT
INVESTMENT HOLDINGS (PROPRIETARY) LIMITED, A BLACK ECONOMIC
EMPOWERMENT COMPANY
* WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcements dated 7
September 2005, 20 October 2005 and 2 December 2005 and are advised
that agreement has now been reached in terms of which two special
purpose vehicles ("SPV"s") as wholly-owned subsidiaries of Innovent
Investment Holdings (Proprietary) Limited ("Innovent Holdings"), a
Black Economic Empowerment ("BEE") company, will, subject to the
conditions precedent in 3 below, subscribe for 11 493 756 new ordinary
shares in Sasfin Bank Limited ("Sasfin Bank"), comprising 10% of the
issued share capital of Sasfin Bank, at a cost of R66,7 million ("the
BEE transaction"). Prior to the BEE transaction Sasfin Bank was a
wholly-owned subsidiary of Sasfin.
1. Background to the BEE transaction
1.1 Rationale
Sasfin has a well-established policy of black economic empowerment at
all levels of the organisation. The group subscribes to the Financial
Sector Charter ("the Charter") and, following the BEE transaction and
the appointment of black directors, which is currently in process,
will substantially meet the Charter"s targets.
1.2 Information on Innovent Holdings
Innovent Holdings is a black-owned and operated financial services
holding company, the principal wholly-owned subsidiaries of which are
Innovent Rental and Asset Management Solutions (Pty) Limited
("Innovent Rentals") and Sunlyn Rentals (Pty) Limited ("Sunlyn
Rentals"). Both subsidiaries focus on equipment rental finance
contracts which are discounted with various banks, including Sasfin
Bank, with Innovent Rentals specialising in user-sourced, larger-value
structured residual rental solutions and Sunlyn Rentals specialising
in supplier-sourced standard rental solutions.
Sasfin has been a minority founding shareholder of Innovent Rentals
since its inception in 2003 when Innovent Rentals became a strategic
business partner of Sasfin. The BEE transaction will further
strengthen this relationship to the benefit of both groups.
The black shareholders have an effective 66.4% voting control of
Innovent Holdings and an effective 70% economic interest in the BEE
transaction, with Sasfin owning the remainder.
The black shareholders of Innovent Holdings include:
* The Innovent Foundation, a Section 21 social responsibility company;
* Royal Africa Gateway Financial Services (Pty) Limited, a strategic
BEE partner to Innovent Rentals and Sunlyn Rentals;
* Executive Directors of Innovent Holdings and Innovent Rentals, DJ
Khumbula and Z Khuzwayo; and
* S Rylands and F Kahn, Non Executive Directors of Innovent Holdings.
2. Structure of the BEE transaction
Sasfin will finance the BEE transaction out of its own resources by
subscribing for 66 666 cumulative redeemable preference shares at a
subscription price of R1 000 each (the "preference shares") in the
share capital of the two SPV"s.
The parties have agreed that it may in due course be appropriate to
expand the BEE participation in the transaction.
The salient terms of the preference shares are as follows:
* They carry a dividend rate of 75% of prime overdraft rate;
* Innovent Holdings may elect to redeem all or part of the preference
shares at any time after three years, and could be instructed by
Sasfin to do so at any time after ten years. After fifteen years
redemption shall be compulsory.
* The agreements relating to the BEE transaction contain provisions
normal for a funding transaction of this nature, including certain
security provisions and the obligation of Innovent Holdings to remain
a BEE company.
As and when Innovent Holdings redeems any preference shares it shall
be entitled to sell to Sasfin the Sasfin Bank shares held by it for
shares in Sasfin.
3. Conditions Precedent, effective date and financial effects
The effective date of the BEE transaction will be 1 January 2006,
subject to, inter alia, the the receipt of all applicable regulatory
approvals as may be required, including the approval of the South
African Reserve Bank.
The effect of the BEE transaction on the financial results of Sasfin
is not material.
4. Withdrawal of cautionary announcement
Shareholders are advised that caution is no longer required when
dealing in their Sasfin securities.
Johannesburg
12 December 2005
Corporate Advisor and Transactional Sponsor
SASFIN CAPITAL
(A division of Sasfin Bank Ltd)
Corporate Law Advisors
Edward Nathan (Pty) Ltd
Lead Sponsor
KPMG Service
Date: 12/12/2005 02:19:17 PM Produced by the JSE SENS Department
