| Wed 21 Feb 2007, 13:59 | | GMB - Glenrand M?I?B - Disposal and Renewal of Cau |
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GMB
GMB
GMB - Glenrand M?I?B - Disposal and Renewal of Cautionary Announcement
GLENRAND M?I?B LIMITED
(Incorporated in the Republic of South Africa)
Licensed Financial Services Provider
(Registration number 1997/008001/06)
Share code: GMB & ISIN: ZAE000078010
("the company" or "Glenrand M?I?B" or "the group")
DISPOSAL OF INTEREST IN ADMIRAL PROFESSIONAL UNDERWRITING AGENCY (PROPRIETARY)
LIMITED AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are advised that Glenrand M?I?B has entered into an agreement
with Swanvest 120 (Proprietary) Limited ("Swanvest") and Wishingwell
Investments (Proprietary) Limited or its nominee ("Wishingwell"), to sell
its 48,4% investment in Admiral Professional Underwriting Agency
(Proprietary) Limited ("Admiral"). Swanvest is a subsidiary company of
Santam Limited, a company listed on the JSE Limited, and Wishingwell is a
company comprising management of Admiral. Swanvest are purchasing 41,1% of
the company`s 48,4% investment in Admiral and Wishingwell are purchasing
the balance of 7,3%. The disposal will be effective five days following the
fulfilment or waiver of all suspensive conditions, as mentioned in
paragraph 6 below.
2. Nature of business
Admiral is an underwriting agency, of which 48,4% is held by Glenrand MIB.
The underwriting agency operates from Johannesburg, Cape Town and Durban
and specialises in the business of underwriting agents for the conclusion
of Professional Indemnity and Errors and Omissions Insurances, Directors
and Officers Liability Insurances, Medical Malpractice Insurances and
Specialised Liability, Sectional Title Property, General Commercial and
Individual High Net Worth Insurances on behalf of various local insurance
companies.
3. Rationale for the disposal
In accordance with the strategic decision to return the group to a core
broking service provider, focusing on short-term insurance broking and
benefit services consulting, a decision was made to dispose of all of the
group`s underwriting interests. This disposal is the final disposal of the
group`s underwriting interests.
4. Consideration
The total consideration for the disposal is R35 million to be settled in
cash ("the consideration").
The proceeds of the disposal will be utilised for working capital and to
fund strategic acquisitions/expansions.
5. Financial effects of the disposal
Based on the audited results of Glenrand M?I?B for the year ended 30 June
2006, the unaudited pro forma financial effects of the disposal on fully
diluted earnings per share ("FDEPS"), fully diluted headline earnings per
share ("FDHEPS"), net asset value per share ("NAV") and net tangible asset
per share ("NTAV") are set out below. This unaudited pro forma financial
information has been prepared for illustrative purposes only and because of
its nature may not give a fair reflection of Glenrand M?I?B`s financial
position and results of operations, nor of the effect and impact of the
disposal on Glenrand M?I?B. The preparation of the pro forma financial
information is the responsibility of Glenrand M?I?B directors
.
Before the After the % Change
disposal (1) disposal (2)
EPS (cents) 20,9 28,5(3 & 4 ) 36
HEPS (cents) (12,1) (14,2)(3 & 4 ) 17
FDEPS (cents) 19,5 26,6(3 & 4 ) 36
FDHEPS (cents) (11,3) (13,3)(3 & 4) 18
NAV (cents) 49,2 59,3 21
NTAV (cents) 12,0 22,2 85
Weighted average shares in
issue for calculating EPS 238 682 238 682
and HEPS (`000)
Weighted average fully
diluted shares in issue 255 594 255 594
for calculating FDEPS and
FDHEPS (`000)
Shares in issue for 226 526 226 526
calculating NAV and NTAV
(`000)
Notes
1. Based on the published consolidated audited results of Glenrand M?I?B
for the year ended 30 June 2006.
2. Based on the assumption that the disposal occurred on 1 July 2005 for
income statement purposes and on 30 June 2006 for balance sheet
purposes.
3. FDEPS and FDHEPS have been adjusted to exclude the income from equity
accounted investees attributable to the disposal for the year ended 30
June 2006.
4. After taking into account profit arising on the disposal after capital
gains tax based on a net asset value of R8,7 million. No interest or
other income has been attributed to the cash proceeds.
6. Suspensive conditions
The suspensive conditions in terms of the agreement include inter alia the
obtaining of Competition Commission approval.
7. Categorisation
The disposal is a Category 3 transaction in terms of the JSE Limited
Listings Requirements.
8. Renewal of Cautionary
Shareholders are referred to the cautionary announcement dated 11 January
2007 and are advised that the company is still in discussions which, if
successfully concluded, could have an impact on the price at which the
company`s ordinary shares trade on the JSE Limited. Accordingly,
shareholders are advised to continue to exercise caution when dealing in
the company`s securities until a further announcement is made.
Randburg
21 February 2007
Investment bank and sponsor
Nedbank Capital
Attorneys to Glenrand M I B
Deneys Reitz
Date: 21/02/2007 13:59:00 Produced by the JSE SENS Department.
