| Thu 30 Mar 2006, 16:30 | | Glenrand - High Court sanctions Glenrand MIBs sche |
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Glenrand - High Court sanctions Glenrand MIB"s scheme of arrangement
GLENRAND MIB LIMITED
(a Licensed Financial Services Provider)
(Incorporated in the Republic of South Africa)
(Registration number 1997/008001/06)
Share code: GMB & ISIN: ZAE000018529
("Glenrand")
HIGH COURT SANCTIONS GLENRAND MIB"s SCHEME OF ARRANGEMENT
The High Court today sanctioned the Scheme of Arrangement, clearing the way for
an increase in Glenrand MIB"s BEE shareholding from 6% to 27.7%.
The R103 million transaction introduces two new broad-based BEE groups - Ayavuna
Women"s Investments and Matemeku Investments - and increases the shareholding of
Glenrand MIB"s long-standing BEE partner, Kunene Brothers Holdings. In three
separate transactions worth R103 million in total, each of the three empowerment
groups will acquire 5.8% of the ordinary equity in Glenrand MIB. This will leave
Ayavuna Women"s Investments and Matemeku Investments with 5.8% each, and the
Kunenes with 11.2%. A further 4.9% will be acquired by the Glenmib Employee
Empowerment Trust on behalf of formerly disadvantaged employees of Glenrand.
The transaction was approved by Glenrand shareholders at a Scheme and a general
meeting on 17 March 2006. Chief executive officer Steve von Roretz says that, as
expected, the Court sanctioned the deal disregarding objections from a
disgruntled former employee who acquired 500 shares in Glenrand with the
apparent aim of delaying the proceedings.
"In essence, what this means is that Glenrand MIB may now proceed with the
finalisation of its empowerment deal, which results in 27.7% of its equity in
the hands of BEE partners," he says. "Obviously, this is just the start of a
process of transformation that will affect every part of the business, from
skills development to procurement."
The Scheme of Arrangement entails a wholly-owned subsidiary of Glenrand MIB,
Risk Funding Services, purchasing 6.7% of the group"s issued share capital with
a further 4.3% to be acquired by the Glenmib Employee Empowerment Trust. Von
Roretz says the Scheme of Arrangement will enable the company to mitigate the
dilutory effect of issuing new shares to the BEE partners. In terms of this
Scheme of Arrangement, Glenrand MIB ordinary shareholders have agreed to sell
approximately12 shares for every 100 shares held at a price of R2.27 a share.
As part of the empowerment enhancement of Glenrand MIB, the company will acquire
from the Glenmib Employee Empowerment Trust the 49,9% in Glenrand MIB Makgulong
not already owned for a consideration of R23 million, which was a negotiated
price and found to be fair and reasonable by independent EY Corporate Finance.
In turn the Glenmib Employee Empowerment Trust is able to participate at group
level, as mentioned above. Makgulong, a majority black-owned empowerment
structure, is to be acquired in its entirety by Glenrand MIB so as to increase
the group"s net profit, thereby offsetting the dilutory effects arising from the
issue of new shares to the group"s BEE partners. Now that the Scheme of
Arrangement has been approved by the High Court, Glenrand MIB qualifies as an
empowered company and there is no need to have the separate Makgulong
empowerment structure.
"The sanctioning of this Scheme of Arrangement by the High Court is an historic
milestone for Glenrand MIB and a crucial part of our growth strategy going
forward. We are delighted to be able to welcome our new BEE partners on board,
and I think the fruits of this new relationship will become evident in the
months and years ahead."
Ends
ISSUED FOR: GLENRAND M.I.B LIMITED
CONTACT : Steve von Roretz, CEO: 011 329 1427 / 083 326 6319
FAX NO : 011 293 2755
E-MAIL : svonroretz@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 : 30 March
Date: 30/03/2006 04:30:31 PM Produced by the JSE SENS Department
