Discovery to raise R825 million for growth and expansion plans

Discovery to raise R825 million for growth and expansion plans                  
DISCOVERY HOLDINGS LIMITED                                                      
(Incorporated in the Republic of South Africa)                                  
(Registration : 1999/007789/06)                                                 
ISIN :          ZAE000022331                                                    
Share Code :    DSY                                                             
("Discovery")                                                                   
Raised capital will fund Discovery Life and Destiny Health"s expansion plans    
Johannesburg, 12 June - Discovery Holdings announced today that it will raise   
R875 million through a rights issue to fund the future growth plans of its life 
assurance subsidiary, Discovery Life, and US health subsidiary, Destiny Health. 
FirstRand, Discovery"s largest shareholder, has given its full commitment to    
fully underwrite the rights issue.                                              
Discovery has grown organically over the last decade to it"s current position as
a focused risk insurer with two key lines of business, healthcare funding and   
life assurance, managing annual inflows of over R10 billion. The current        
embedded value of R3.6 billion has been generated on the basis of R176 million  
capital invested. The additional capital to be raised will be used to fund      
Discovery Life"s South African expansion and that of Destiny Health in the      
United States (US).                                                             
According to chief executive of Discovery, Adrian Gore, Discovery Life is       
actively building a new-generation life assurer that is and will make a         
significant impact in the life assurance market. "Discovery Life has been built 
on the foundation of product success, achieved through the separation of risk   
and investment and a comprehensive range of unique benefits. The launch of the  
Integrator last year enables clients of Discovery Life, Health and Vitality to  
enjoy dynamic health management and significant reductions in life assurance    
premiums. The combination of these products enables Discovery Life to meet our  
clients" total risk needs", he said                                             
Discovery Life"s product leadership has manifested in a rapidly growing share of
the market - approximately 25% of the new protection business written by        
independent brokers is placed with Discovery Life. Discovery Life"s leadership  
position was recently confirmed by the South African Financial Services         
Intermediaries Association, which recognised Discovery Life as the "Individual  
Life and Risk Assurer of the Year".                                             
Discovery Life has grown to a value in excess of R1 billion today. This growth  
is expected to continue, based on its product leadership, integrated product    
offering and extensive distribution network. R650 million of the R875 million   
raised will be used to fund this growth.                                        
The balance of the capital raised, R225 million, will be deployed within        
Discovery"s US subsidiary, Destiny Health. Destiny is the conduit for           
Discovery"s unique Comprehensive Consumer Driven Healthcare model in the US.    
"We believe that we can build Destiny Health into a viable business in the US   
and ultimately the first mainstream US consumer-driven health plan. The capital 
raised will be used to facilitate this expansion over the next two to three     
years", Gore said.                                                              
Destiny is focusing on three key areas in order to achieve success, he said.    
"Firstly, achieving break-even by January 2004 by carefully managing internal   
costs and growing new business. Secondly, utilising the efficiency and scale of 
our South African back-office to create structural competitiveness. Finally,    
expansion through joint ventures with the highly rated Guardian Life Insurance  
Company of America and Tufts Health Plan will provide Destiny with immediate    
brand and financial credibility, a turnkey distribution footprint and access to 
US health management expertise."                                                
The capital raised will be used to fund Destiny"s current infrastructure and    
marketing efforts in Illinois, expand through its joint ventures and restructure
its balance sheet with the advantage of reducing exposure to the US dollar.     
Laurie Dippennaar, CEO of FirstRand Ltd, commented, "Discovery has produced     
significant value utilising relatively low amounts of capital. FirstRand sees   
significant opportunity in both Discovery Life and Destiny Health, and we are   
committed to Discovery. Therefore we are underwriting the capital raising."     
The last day of trade in Discovery shares in order to participate in the claw-  
back offer is 27 June. The offer opens at 09:00 on 7 July and closes at 14:30 on
25 July. The new Discovery shares will be listed on the JSE Securities Exchange 
on 21 July. The results of the offer will be announced and the new Discovery    
shares issued on 28 July.                                                       
Ends                                                                            
12 June                                                                         
Issued on behalf of Discovery Holdings by Corporate Communications Consultants  
For further details contact:                                                    
Adrian Gore - Chief Executive of Discovery                                      
Tel: 011-529- 2854                                                              
Or                                                                              
Rosemary Renton - Corporate Communications Consultants                          
Mobile: 082 491 0364                                                            
Date: 12/06/2003 02:32:04 PM Supplied by www.sharenet.co.za                     
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