FirstRand Limited - Announcement to shareholders

FirstRand Limited - Announcement to shareholders                                
FirstRand Limited                                                               
Incorporated in the Republic of South Africa                                    
Registration number: 1966/010753/06                                             
Share Code: FSR  ISIN: ZAE 0000 14973                                           
("FirstRand" or the "company")                                                  
Announcement to shareholders                                                    
1.   Capital raising by FirstRand                                               
In order to facilitate the re-organisation of the FirstRand group and the       
underwriting of Discovery Holdings Limited ("Discovery") claw-back offer, as    
discussed below, FirstRand will issue approximately R1,4 billion of redeemable  
cumulative preference shares ("the preference shares"), by no later than 30     
September 2003.  The issue of the preference shares by FirstRand enables it to  
raise the capital cost-effectively and to optimally allocate it between its     
three operating entities being Momentum, Discovery and the FirstRand Banking    
Group.                                                                          
2.   Underwriting of the Discovery claw-back offer                              
Shareholders are referred to the claw-back offer announced by Discovery today,  
12 June 2003.  Shareholders are advised that the FirstRand group has entered    
into an agreement to underwrite the claw-back offer of R875 million.            
3.   Re-organisation of the FirstRand group                                     
After the financial year ending 30 June 2003, but no later than 30 September    
2003, FirstRand"s 62% investment in Discovery, currently held by Momentum, will 
be transferred and held directly by FirstRand.                                  
The rationale for the re-organisation is outlined below:                        
-    Momentum has completed a detailed evaluation of its capital management     
programme, with the objective of optimising the asset composition of the        
shareholders" portfolio.  The transfer of Discovery to FirstRand is one of the  
first steps in this capital restructuring programme;                            
-    the transfer will improve the diversification of the assets used to back   
the statutory capital requirements of Momentum as the investment in Discovery   
constituted approximately 30% of the shareholder portfolio of Momentum (as at 31
December 2002); and                                                             
-    following the introduction of the Financial Services Board"s new prescribed
requirements for the calculation of the value of group undertakings (strategic  
investments), the value of Discovery, for Momentum"s statutory solvency         
purposes, would be limited to a value less than its market value.               
4.   Further details                                                            
Further details of the capital raising, the re-organisation of the FirstRand    
group and the restructuring of the Momentum shareholders portfolio will be      
included in FirstRand"s 2003 annual results announcement to be released during  
September 2003.                                                                 
Sandton                                                                         
12 June 2003                                                                    
Merchant Bank and Sponsor                                                       
RAND MERCHANT BANK                                                              
A division of FirstRand Bank Limited                                            
CORPORATE FINANCE                                                               
Date: 12/06/2003 02:31:04 PM Supplied by www.sharenet.co.za                     
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