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MVG/ MVGP - Mvelaphanda Group Limited - Company announcement
MVELAPHANDA GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1995/004153/06)
Ordinary share code: MVG ISIN: ZAE000060737
Preference share code: MVGP ISIN: ZAE000073540
("Mvela Group" or "the Company")
ANNOUNCEMENT REGARDING THE RESTRUCTURING OF MVELA GROUP`S INTEREST IN LIFE
HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE HEALTHCARE"), THE LISTING AND
UNBUNDLING OF HEALTH STRATEGIC INVESTMENTS LIMITED (CURRENTLY NEWSHELF 776
(PROPRIETARY) LIMITED) ("HEALTH") AND THE WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Holders of ordinary shares and preference shares in Mvela Group ("Shareholders")
are referred to the SENS announcement dated 23 April 2010 wherein it was
announced that subsequent to the successful implementation of the listing of
Life Healthcare (the "Life Healthcare Listing") on the exchange operated by the
JSE Limited ("JSE"), the Life Healthcare Repurchase and the Disposal as detailed
below, Mvela Group together with Brimstone Investment Corporation Limited
("Brimstone") planned to undertake a series of internal restructurings that
would culminate in the unbundling of certain Mvela Group and Brimstone
controlled entities` remaining shareholdings in Life Healthcare to Mvela Group
ordinary shareholders and shareholders of Brimstone ("Brimstone Shareholders")
respectively.
The purpose of this announcement is to provide Shareholders with pertinent
information relating to:
- the updated position on the disposal by Mvela Group of an effective 3.16% of
its interest held in Life Healthcare through Business Venture Investments No 813
(Proprietary) Limited ("BVI 813") (the "Disposal") as part of the Life
Healthcare Listing, as detailed in paragraph 2 below;
- the series of transaction steps to be implemented by Mvela Group and Brimstone
to consolidate a portion of their combined interest in Life Healthcare into
Health (the "Restructuring") as detailed in paragraph 3 below;
- the proposed listing of the ordinary shares of Health on the JSE (the "Health
Listing") as asset backed securities ("ABS"), followed by the proposed
unbundling of Health (the "Unbundling") as detailed in paragraph 4 below;
- the terms and anticipated timetable of the Unbundling; and
- the conditions which need to be fulfilled before the Unbundling can be
effected.
A circular providing information on the Disposal, the Restructuring, the
Unbundling and incorporating a notice convening a general meeting of
Shareholders (the "Circular") will be posted to Shareholders in due course. The
Circular will be posted together with the Health pre-listing statement (the
"Health PLS") which contains information relating to the Health Listing.
2. The Disposal
As detailed in the SENS announcement released on Friday, 23 April 2010 and in
the press on Monday, 26 April 2010, Mvela Group owned an effective 21.65% of
Life Healthcare prior to the Life Healthcare Listing, of which 4.25% was held
through its wholly-owned subsidiary Mvelaphanda Strategic Investments
(Proprietary) Limited ("MSI") and the balance of 17.40% was indirectly held
through BVI 813.
Following the Life Healthcare Listing on the JSE on Thursday, 10 June 2010, the
following steps have been implemented:
- the repurchase by Life Healthcare of 30.85% of the issued ordinary shares in
Life Healthcare ("Life Healthcare ordinary shares") prior to the Life Healthcare
Listing (the "Life Healthcare Repurchase"), including a portion of the Life
Healthcare ordinary shares held by BVI 813;
- the repurchase by BVI 813 of all of the BVI 813 ordinary shares held by the
trustees for the time being of the Ammed Management Trust;
- the repurchase by BVI 813 of all of the BVI 813 ordinary shares held by
Newshelf 779 (Proprietary) Limited; and
- the acquisition by BVI 813 of a further 1.00% of the issued Life Healthcare
ordinary shares.
Subject to the relevant conditions precedent set out in paragraph 6 below, it is
anticipated that the following steps will be completed before Friday, 2 July
2010:
- the remaining cash proceeds in BVI 813 will be distributed to Business Venture
Investments No 931 (Proprietary) Limited ("BVI 931") as a dividend;
- BVI 931 will declare a dividend of R180 million to each of its shareholders,
Health and Newshelf 778 (Proprietary) Limited ("Newshelf 778");
- BVI 931 will implement two specific share repurchases:
- BVI 931 will repurchase 4 316 903 of BVI 931`s ordinary shares held by
Health for an aggregate consideration of R173 million and will simultaneously
allot and issue 4 316 903 A ordinary shares in its capital (the "BVI 931 A
ordinary shares") to Health;
- BVI 931 will repurchase 10 325 777 of BVI 931`s ordinary shares held by
Newshelf 778 utilising the remaining proceeds in BVI 931 of R413 million and
will simultaneously allot and issue 10 325 777 BVI 931 A ordinary shares to
Newshelf 778.
Following the implementation of the steps set out above, Mvela Group will have
disposed of an effective 3.16% interest in Life Healthcare through BVI 813 and
will have received net proceeds of R353 million.
These proceeds have been and/or will be utilised to, inter alia, redeem the IDC
preference share funding in Health and to repay any remaining debt obligations
of Mvela Group to the extent possible.
Through MSI, Mvela Group is participating in the 30 day overallotment option
(the "Life Healthcare Overallotment") that MSI, together with the shareholders
of Life Healthcare just prior to the Life Healthcare Listing, granted the joint-
global coordinators and joint bookrunners of the Life Healthcare Listing ("Joint
Bookrunners"). In terms of the Life Healthcare Overallotment, the Joint
Bookrunners can purchase up to 10 422 097 additional Life Healthcare ordinary
shares from MSI (1.00% of the Life Healthcare ordinary shares in issue) at
R13.50, being the price at which the Life Healthcare ordinary shares were listed
for the purpose of covering short positions resulting from overallotments or
from sales of Life Healthcare ordinary shares on or before the end of the 30 day
period from the Life Healthcare Listing, ending on Friday, 9 July 2010
("Stabilisation Period"). An announcement will be released on SENS after the
Stabilisation Period to inform Shareholders of the exact number of Life
Healthcare ordinary shares disposed of by MSI in terms of the Life Healthcare
Overallotment.
Following the Disposal, Mvela Group will own an effective 14.24% interest in
Life Healthcare through BVI 813 and 4.25% through MSI (prior to the exercise of
Life Healthcare Overallotment). The remaining interest in MSI (post the exercise
of the Life Healthcare Overallotment) will be retained to secure outstanding
debt obligations.
Please refer to Mvela Group`s website for diagrammatic information regarding the
resultant shareholding structure post the implementation of the Disposal and
prior to the exercise of the Life Healthcare Overallotment at:
www.mvelagroup.co.za
3. The Restructuring
In order to simplify Mvela Group`s and Brimstone`s holding structure in Life
Healthcare, Brimstone will dispose of its entire indirect shareholding in Life
Healthcare held through Newshelf 778 (representing approximately 12.36% of Life
Healthcare) to Health, for 46.48% of the issued share capital of Health
(representing approximately 12.36% of Life Healthcare). The ordinary shares in
the issued share capital of Health will then be listed on the JSE as ABSs in the
Investment Products sector on or about Monday, 16 August 2010. The only asset of
Health at the time of the Health Listing will, following the implementation of
the Restructuring as contemplated below, be a 26.60% direct holding in Life
Healthcare.
The proposed transaction steps through which the Restructuring will occur are
set out below:
3.1. Step 1
MSI will unbundle its 100% shareholding in Health to Mvela Group in terms of
section 46 of the Income Tax Act, 1962 as amended (the "Income Tax Act");
3.2. Step 2 (a)
Subject, inter alia, to Brimstone Shareholder approval, Health will acquire all
of the ordinary shares in Newshelf 778 from Brimstone in terms of section 42 of
the Income Tax Act. In exchange, Health will allot and issue 128 849 235
ordinary shares in Health ("Health Shares"), representing 46.48% of the issued
share capital of Health as consideration;
3.3. Step 2(b)
Simultaneously with step 2(a), Newshelf 778 will allot and issue 900 A ordinary
shares ("Newshelf 778 A shares"), which shares have no rights to the profits
and/or assets of Newshelf 778, to Brimstone;
3.4. Step 3
BVI 813 will then (pursuant to a resolution in terms of section 90 of the
Companies Act, 1973, as amended (the "Companies Act")) unbundle the 26.60%
interest in Life Healthcare to BVI 931 in terms of section 46 of the Income Tax
Act, by making a distribution in specie thereof;
3.5. Step 4
BVI 931 will then (pursuant to a special resolution of its shareholders in terms
of section 228 of the Companies Act and a resolution in terms of section 90 of
the Companies Act) unbundle the 26.60% interest in Life Healthcare distributed
to it by BVI 813 in terms of step 3, to its shareholders, Newshelf 778 and
Health in terms of section 46 of the Income Tax Act, by making a distribution in
specie thereof;
3.6. Step 5
Following step 4, Newshelf 778 (pursuant to a special resolution of its
shareholders in terms of section 228 of the Companies Act and a resolution in
terms of section 90 of the Companies Act), in anticipation of its liquidation,
will distribute the Life Healthcare ordinary shares held by it and the BVI 931 A
ordinary shares held by it, to its sole shareholder, Health in terms of section
47 of the Income Tax Act;
3.7. Step 6
Brimstone will sell 19 197 619 Health ordinary shares (representing an effective
1.84% interest in Life Healthcare) to Newshelf 1055 (Proprietary) Limited
(registration number 2010/006319/07), which is a wholly-owned subsidiary of
Brimstone ("Subco"), for additional shares in Subco;
3.8. Step 7
The Newshelf 778 A shares issued to Brimstone in terms of step 2(b) will be
repurchased and cancelled by Newshelf 778; and
3.9. Step 8
Health Shares will be listed as ABSs on the JSE on or about Monday, 16 August
2010.
Following the implementation of Step 7 above, Newshelf 778 will be liquidated in
terms of section 47 of the Income Tax in due course.
Please refer to Mvela Group`s website for diagrammatic information reflecting
the resultant shareholding structure (prior to the exercise of the Life
Healthcare Overallotment) following the Restructuring and before the
implementation of the Unbundling at: www.mvelagroup.co.za
4. Details of the Unbundling
4.1. The Unbundling and Entitlement Ratio
Subject to the fulfilment of the conditions precedent set out in paragraph 6
below, following the Health Listing and in accordance with the salient dates and
times set out in paragraph 5 below, Mvela Group will unbundle all of the shares
held by it in Health, being 148 364 143 Health Shares, constituting 53.52% of
the entire issued ordinary share capital of Health, to Mvela Group ordinary
shareholders, in the entitlement ratio of 33.4550 Health Shares for every 100
Mvela Group ordinary shares held (the "Entitlement Ratio") on Friday, 20 August
2010 (the "Unbundling Record Date"). The Entitlement Ratio will be adjusted to
take account of the effect of the conversion (if any) of Mvela Group preference
shares ("Preference Shares"), into ordinary shares as detailed in paragraph 4.4
below. The Entitlement Ratio will be confirmed or revised, as the case may be,
in the finalisation announcement.
If the application of the Entitlement Ratio would result in the aggregate of
Health Shares to be distributed to a Mvela Group ordinary shareholder not being
a whole number, the relevant fraction will be rounded up to the nearest whole
number if the fraction is equal to or greater than 0.5 of a Health Share; or
rounded down to the nearest whole number if the fraction is less than 0.5 of a
Health Share.
The Unbundling will be in terms of sections 90 and 228 of the Companies Act, the
relevant provisions of the JSE Listings Requirements and section 46 of the
Income Tax Act.
4.2. Rationale for the Unbundling
Mvela Group announced at its annual results presentation on Thursday, 3
September 2009 that it is committed to the realisation and unbundling of the
Company`s assets. Pursuant to this strategy, Mvela Group believes that the
unbundling of Health to Mvela Group ordinary shareholders is in the best
interest of the Mvela Group ordinary shareholders.
The Unbundling will result in Mvela Group ordinary shareholders directly holding
Health Shares. These Health Shares will trade on the JSE with reference to the
underlying see-through value of Health`s interest in Life Healthcare. This could
potentially unlock significant value for Mvela Group ordinary shareholders, as
the Company is trading at a discount to the value of its underlying investments,
and will allow Mvela Group ordinary shareholders to trade their indirect
interest in Life Healthcare separately to their Mvela Group ordinary shares.
4.3. Implementation of the Unbundling
If the conditions precedent referred to in paragraph 6 are fulfilled on or
before Thursday, 5 August 2010:
the Unbundling Record Date will be close of business on Friday, 20 August 2010;
and
all of Mvela Group`s Health Shares will on Monday, 23 August 2010 be distributed
to Mvela Group ordinary shareholders recorded in the Mvela Group register on
Friday, 20 August 2010 in the Entitlement Ratio (the "Unbundled Health Shares").
Mvela Group ordinary shareholders holding certificated shares will be issued
their respective Unbundled Health Shares in certificated form and share
certificates will be posted, at the risk of the Mvela Group ordinary
shareholders concerned, by registered post on Monday, 23 August 2010, to the
addresses reflected in the Mvela Group register on the Unbundling Record Date.
Such Mvela Group ordinary shareholders are advised that they will have to
dematerialise the Unbundled Health Shares received by them in certificated form,
prior to trading in such shares on the JSE. Mvela Group ordinary shareholders
holding dematerialised shares will have their accounts at their CSDP or broker
updated on Monday, 23 August 2010 with the relevant Unbundled Health Shares.
4.4. Mvela Group Preference Shares
The terms of conversion of the Preference Shares into Mvela Group ordinary
shares are set out in a circular ("Conversion Circular") which was posted to
Mvela Group preference shareholders ("Preference Shareholders") on 23 October
2009. As set out in the Conversion Circular, Preference Shareholders are
entitled, at their election, to convert their Preference Shares into Mvela Group
ordinary shares ("conversion") at any time up until 4 November 2010.
The conversion terms set out in the Conversion Circular specify that the
conversion date for any such conversion may not occur within the period on or
after the "finalisation date" of any corporate action affecting any or all of
the Mvela Group ordinary shares, up to and including the relevant "last day to
trade" of such corporate action. As the Unbundling is regarded as a corporate
action, the conversion date (which date must be a Friday) for any conversion may
not take place from Monday, 2 August 2010 to Friday, 13 August 2010.
Accordingly, Preference Shareholders who wish to participate in the Unbundling,
must lodge their duly completed notices of conversion, in accordance with the
instructions set out in the Conversion Circular, with Computershare Investor
Services (Proprietary) Limited (the "Transfer Secretaries"), 70 Marshall Street,
Johannesburg 2001 (PO Box 61763, Marshalltown, 2107) by no later than the close
of business on Wednesday, 21 July 2010. The conversion notice must specify a
conversion date (which date must be a Friday) which must be no later than the
Friday prior to the finalisation date applicable to the Unbundling, being
Friday, 30 July 2010.
As set out in paragraph 4.1 above, if Preference Shares are so converted, the
Entitlement Ratio will change. The Entitlement Ratio will accordingly be
confirmed or revised, as the case may be, in the finalisation announcement.
Preference Shareholders wishing to convert their Preference Shares into Mvela
Group ordinary shares should note that conversions may only take place in
denominations of 1 000 Preference Shares, or entire holdings, where Preference
Shareholders hold less than 1 000 Preference Shares.
The conversion ratio will be adjusted to take account of the effect of the
Unbundling. The revised conversion ratio will be announced as soon as it can be
determined, after the effective date of the Unbundling.
4.5. Lock-in period
In terms of the Life Healthcare Listing, the holders of ordinary shares in Life
Healthcare as reflected on the share register of Life Healthcare on Thursday, 4
March 2010 including, inter alia, Brimstone and Mvela Group, agreed to a lock-in
period of 180 days from the Life Healthcare Listing, during which period they
agreed not to dispose of their Life Healthcare ordinary shares other than in
terms of the Unbundling, the Restructuring and the Disposal (the "Life
Healthcare Lock-in"). Pursuant to the Life Healthcare Lock-in, Mvela Group
ordinary shareholders representing 50% of the ordinary issued share capital of
Mvela Group, have undertaken not to dispose of their Health Shares for a period
of 180 days after the Life Healthcare Listing.
Following the expiry of the Life Healthcare Lock-in, it is the intention of the
directors of Health to unbundle the underlying Life Healthcare ordinary shares
to holders of Health Shares.
5. Salient dates and times
The salient dates and timed relating to the Unbundling are set out below:
2010
Terms announcement released on SENS on Tuesday, 22 June
Terms announcement published in the South African Wednesday, 23 June
press on
Circular posted to Shareholders on or about Monday, 28 June
Distribution of Health Pre-Listing Statement to Monday, 28 June
Shareholders on or about
Publication of abridged Health Pre-Listing Statement Monday, 28 June
on
Last day for the receipt of forms of proxy for the Monday, 19 July
combined general meeting by 10:00 on
Combined general meeting to be held at Melrose Arch Tuesday, 20 July
Hotel, High Street Melrose Arch, Johannesburg at 10:00
on
Results of the combined general meeting released on Tuesday, 20 July
SENS on
Results of the combined general meeting published in Wednesday, 21 July
the South African press on
Last date for Preference Shareholders to lodge Wednesday, 21 July
conversion notices with the Transfer Secretaries, in
order to participate in the Unbundling by no later
than the close of business on
Last conversion date for Preference Shareholders to Friday, 30 July
participate in the Unbundling
Finalisation announcement, including confirmation or Thursday, 5 August
adjustment of Entitlement Ratio released on SENS by no
later than
Last day to trade in Mvela Group ordinary shares on Friday, 13 August
the JSE to participate in the Unbundling on
Mvela Group ordinary shares trade "ex" their Monday, 16 August
entitlement to Health Shares received by the Mvela
Group ordinary shareholders pursuant to the Unbundling
on
Mvela Group ordinary shareholders commence trading Monday, 16 August
their Unbundled Health Shares (the JSE share code will
be HSI and the ISIN will be ZAE000146742) on
Announcement of the specified ratio in respect of the Wednesday, 18 August
apportionment of the base cost to Health for
taxation/CGT purposes on or about
Unbundling Record Date on Friday, 20 August
Dematerialised Mvela Group ordinary shareholders will Monday, 23 August
have their accounts with their CSDP or broker updated
with the Unbundled Health Shares on or about
Share certificates in respect of the Unbundled Health Monday, 23 August
shares will be posted, by registered post, at the risk
of the certificated Mvela Group ordinary shareholders
concerned, to certificated Mvela Group ordinary
shareholders on or about
Notes:
1. The above dates and times are subject to change. Any material changes will
be announced on SENS and published in the South African press.
2. All times quoted are local times in South Africa.
3. No dematerialisation or rematerialisation of Mvela Group ordinary share
certificates may take place between Monday, 16 August 2010 and Friday, 20
August 2010, both days inclusive.
6. Conditions precedent to the Restructuring and the Unbundling
6.1. Conditions precedent to the Restructuring
By no later than 5 August 2010 (or such later date as is agreed):
6.1.1. The special resolution set out in the notice of general meeting attached
to the Circular, authorising the Unbundling, shall have been passed by a 75%
majority of the votes of Shareholders present and voting at the meeting and
shall have been registered at the Companies and Intellectual Property
Registrations Office in Pretoria;
6.1.2. The Brimstone Shareholders shall have authorised, the Restructuring and
the Unbundling, by a special resolution, and such resolution shall have been
registered at the Companies and Intellectual Property Registrations Office in
Pretoria;
6.1.3. The transactions contemplated in paragraph 2 and 3.1 above shall have
been validly implemented by the applicable parties thereto (having obtained all
requisite shareholder, board and/or regulatory approvals);
6.1.4. The shareholder resolutions necessary to give effect to steps 1 to 8 set
out in paragraph 3 above, being resolutions of the shareholder/s of (i) Health,
(ii) Newshelf 778, (iii) BVI 813, and (iv) BVI 931, shall have been passed and,
if applicable, shall have been registered with the Companies and Intellectual
Property Registrations Office in Pretoria;
6.1.5. The shareholders` resolutions necessary to give effect to the conversion
of Health into a public company, the change of name to Health Strategic
Investments Limited, the reorganisation of the authorised and issued share
capital of Health and the adoption of the new memorandum and articles of
association, shall have been registered with the Companies and Intellectual
Property Registrations Office in Pretoria;
6.1.6 The JSE shall have approved the Health Listing;
6.1.7. Brimstone being satisfied with the results of its due diligence
investigation of Health; and
6.1.8. Mvela Group being satisfied with its due diligence investigation of
Newshelf 778.
6.2. Condition precedent to the Unbundling
6.2.1. By no later than 5 August 2010 (or such later date as is agreed), Step 1
to Step 7 of the Restructuring set out in paragraph 3 above shall have been
validly implemented by the applicable parties thereto (having obtained all
requisite Shareholder, board and/or regulatory approvals).
7. Financial effects
The table below sets out the pro forma financial effects of the Unbundling on
Mvela Group`s reviewed earnings per ordinary share, reviewed headline earnings
per ordinary share, reviewed fully diluted earnings per ordinary share and
reviewed fully diluted headline earnings per ordinary share for the six months
ended 31 December 2009, as well as Mvela Group`s net asset value per ordinary
share and net tangible asset value per ordinary share at 31 December 2009. These
pro forma financial effects have been prepared for illustrative purposes only
and, because of their nature, may not fairly present Mvela Group`s financial
position, changes in equity, and results of operations or cash flows. The pro
forma financial information is the responsibility of the Directors of Mvela
Group.
Before Adjustment Unaudited Adjustment
(cents) due to the pro forma due to the
Disposal after the Restructuring
(cents) Disposal (cents)
(cents)
Earnings per 117.3 11.6 129.0 10.4
ordinary share
Diluted earnings 105.9 10.2 116.0 9.1
per ordinary share
Headline earnings 124.9 (14.4) 110.5 5.6
per ordinary share
Diluted headline 112.5 (12.6) 99.9 4.9
earnings per
ordinary share
NAV per ordinary 929.1 13.8 942.9 0.01
share
TNAV per ordinary 742.7 13.8 756.5 0.01
share
Number of ordinary 465 386 465 386
shares in issue
(`000)
Weighted number of 406 792 406 792
ordinary shares
(`000)
Unaudited pro Adjustment Unaudited Total
forma after due to the pro forma percentage
the Unbundling after the change
Restructuring (cents) Unbundling
(cents) (cents)
Earnings per 139.4 (81.4) 57.9 (50.63)
ordinary share
Diluted earnings 125.1 (71.2) 53.9 (49.08)
per ordinary share
Headline earnings 116.1 (52.4) 63.7 (49.00)
per ordinary share
Diluted headline 104.8 (45.8) 59.0 (47.59)
earnings per
ordinary share
NAV per ordinary 942.9 (284.3) 658.6 (29.12)
share
TNAV per ordinary 756.5 (284.3) 472.2 (36.43)
share
Number of ordinary 465 386 465 386
shares in issue
(`000)
Weighted number of 406 792 406 792
ordinary shares
(`000)
Notes and assumptions:
1. The Mvela Group financial information reflected in the "Before" column has
been extracted from the reviewed interim results of Mvela Group for the six
months ended 31 December 2009.
2. The pro forma adjustments to the statement of comprehensive income have been
calculated on the assumption that the Disposal, the Newshelf 778 acquisition and
the Unbundling were implemented on 1 July 2009.
3. The pro forma adjustments to the statement of financial position have been
calculated on the assumption that the Disposal, the Newshelf 778 acquisition and
the Unbundling were implemented on 31 December 2009.
4. Deferred capital gains tax previously raised on the fair value adjustment of
the Life Healthcare shares sold in terms of the Disposal has been reversed as it
will not be incurred.
5. Dividends received on Life Healthcare shares sold in terms of the Disposal
have been deducted from previously reported earnings.
6. The fair value adjustment for the six month period ended 31 December 2009 on
the Life Healthcare shares sold in terms of the Disposal has been reversed given
that the fair value adjustments would naturally fall due to the owner of the
shares.
7. It is assumed that the proceeds (net of transaction costs) would be utilised
by Health to settle the IDC debt.
8. The Health financial information has been derived from the reviewed interim
results of Health for the six months ended 31 December 2009.
9. The Newshelf 778 financial information has been derived from the audited
financial statements of Newshelf 778 for the year ended 31 December 2009.
10. The accounting policies applied by Newshelf 778 for purposes of preparing
the pro forma financial information are consistent with those applied by Mvela
Group. To this end the following adjustments have been made to the previously
reported financial information of Newshelf 778:
10.1. Deferred Secondary Tax on Companies ("STC") payable on settlement of the
IDC debt has been reversed.
10.2. The fair value of Newshelf 778`s investment in Life Healthcare and related
debt at 31 December 2009 (for the pro forma adjustments to the statement of
financial position) and at 1 July 2009 (for the pro forma adjustments to the
statement of comprehensive income) was adjusted in line with the fair value
applied by Mvela Group.
11. Transaction costs have been expensed to the statement of comprehensive
income.
12. Any conversion of Preference Shares into Mvela Group ordinary shares prior
to the finalisation date of the Unbundling will have no impact on the financial
effects as set out above as they have been formulated on a fully diluted basis.
8. Updated intrinsic net asset value ("NAV")
Following the implementation of the Life Healthcare Listing and the Disposal but
prior to the Unbundling, Mvela Group`s investment in Life Healthcare increased
in value from R1.85 billion at 31 December 2009 to R2.59 billion as at the date
of the Life Healthcare Listing. This translates into an intrinsic NAV of R5.57
per Mvela Group share from R3.96 per Mvela Group share as at 31 December 2009.
No material change is expected in the intrinsic NAV of Mvela Group`s other
assets. The table below is the pro forma intrinsic NAV of Mvela Group as at 31
December 2009 after the implementation of the Life Healthcare Listing, the
Disposal and the Unbundling.
31-Dec-09
Intrinsic Per Intrinsic Per
net asset share net asset share
value value
Before After
Before After
Rm Rm
R R
Life 1 850 3.96 694 1.49
Healthcare
Mvelaserve 1 295 2.78 1 295 2.78
Limited
Absa Group 1 018 2.18 1 018 2.18
Limited
Group Five 245 0.53 245 0.53
Limited
Vox Telecom (203) (0.42) (203) (0.42)
Limited
Avusa Limited (397) (0.85) (397) (0.85)
Others 24 0.05 24 0.05
Net cash 508 1.09 438 0.94
Total 4 340 9.32 3 114 6.70
9. Documentation
The Circular will be posted to Shareholders on or about Monday, 28 June 2010.
The Health PLS will be posted together with the Circular.
The Circular will also be available on Mvela Group`s website,
www.mvelagroup.co.za, after it has been posted.
10. Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement dated Monday, 8 March
2010 and the renewals thereof on Friday, 23 April 2010 and Tuesday, 18 May 2010
and are advised that the cautionary announcements are hereby withdrawn and that
they are no longer required to exercise caution when dealing in Mvela Group
securities.
Johannesburg
22 June 2010
Merchant bank, structuring adviser and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Reporting Accountants
PKF (Jhb) Inc.
Attorneys
Bowman Gilfillan Inc.
Advisers to Mvela Group
Afropulse Group (Proprietary) Limited
Financial PR adviser
College Hill
Date: 22/06/2010 07:18:06 Supplied by www.sharenet.co.za
Produced by the JSE SENS Department.
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