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CML
CML
Coronation Fund Managers - Acquisition Of Shareholding In Namibian Harvest
Coronation Fund Managers Limited
(Incorporated in the Republic of South Africa)
(Registration number 1973/009318/06)
ISIN: ZAE000047353
Share code: CML
("Coronation Fund Managers" or "the Company")
ACQUISITION OF SHAREHOLDING IN NAMIBIAN HARVEST INVESTMENTS LIMITED
INTRODUCTION
Coronation Fund Managers is pleased to announce that Coronation Investment
Management (Proprietary) Limited ("CIM"), a wholly-owned subsidiary, has
concluded an agreement to acquire a 47.14% interest in Namibian Harvest
Investments Limited ("Namibian Harvest"), subject to the condition precedent as
detailed below ("the Acquisition").
BACKGROUND INFORMATION ON NAMIBIAN HARVEST
Namibian Harvest was incorporated in Namibia as a public company in November
1997 and listed on the Namibian Stock Exchange in July 1998. Namibian Harvest is
the holding company of Namibia Asset Management Limited and Namibia Unit Trust
Managers Limited (jointly the "asset management business") where the core
business of the Namibian Harvest Group is carried out.
Namibian Harvest is in the process of disposing of all other non-asset
management investments held by it.
DETAILS OF THE ACQUISITION
CIM has entered into an agreement with Coronation Equities Limited ("Coronation
Equities") to acquire its entire 47.14% in Namibian Harvest for a cash
consideration of R8.9 million. The effective date of the Acquisition is 1
October 2005.
RELATED PARTY TRANSACTION
Coronation Equities is a wholly-owned subsidiary of Coronation Investments and
Trading Limited, Coronation Fund Managers" major shareholder. In turn, CIM is a
wholly-owned subsidiary of Coronation Fund Managers. Accordingly, the
Acquisition is a small related party transaction in terms of the Listings
Requirements of the JSE Limited ("Listings Requirements"). As a result, the
Acquisition is subject to the obtaining of a favourable fair and reasonable
opinion from an independent expert.
Coronation Fund Managers will make a further announcement on SENS once the
opinion has been obtained, which opinion will be available for inspection at the
Company"s registered office for a period of 28 days thereafter.
RATIONALE FOR THE ACQUISITION
Since Namibian Harvest"s establishment in 1997, CIM and its subsidiaries have
provided substantial support both in the establishment and development of the
asset management businesses of Namibian Harvest. This has been done through
provision of training, marketing and business development support to the asset
management businesses. In addition to this a sub-advisory agreement has been in
place whereby Coronation Asset Management Limited, a wholly-owned subsidiary of
CIM, has provided asset management services to Namibian Harvest.
Post the delisting of Coronation Holdings Limited ("Coronation Holdings") and
the simultaneous listing of Coronation Fund Managers; it is more appropriate
that the stake in Namibian Harvest that had resided with Coronation Holdings
(through Coronation Equities) should be held by CIM due its ongoing relationship
with Namibian Harvest.
In terms of the Acquisition, CIM is purchasing the value of the asset management
businesses within Namibian Harvest. Any earnings or losses pertaining to the
remaining investments held by Namibian Harvest, which are in the process of
being disposed of, will be passed on to Coronation Equities. It is expected that
these will all be disposed of by the end of the 2006 calendar year at which
point Namibian Harvest will be a pure asset management business.
FINANCIAL EFFECTS
The Acquisition will not have a material effect on Coronation Fund Managers"
earnings, headline earnings, net asset value or net tangible asset value per
share.
CONDITION PRECEDENT
The Acquisition is subject to obtaining a favourable fair and reasonable opinion
in terms of the Listings Requirements.
Cape Town
24 March 2006
Issued by Sponsor: Deutsche Securities (SA) (Proprietary) Limited
Date: 24/03/2006 01:16:04 PM Produced by the JSE SENS Department
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