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Discovery Holdings Limited - Discovery Brings In Strategic Empowerment Partners

Release Date: 13/09/2005 11:23
Code(s): DSY
Wrap Text

Discovery Holdings Limited - Discovery Brings In Strategic Empowerment Partners DISCOVERY HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1999/007789/06) ISIN: ZAE000022331 Share Code: DSY DISCOVERY BRINGS IN STRATEGIC EMPOWERMENT PARTNERS Discovery Holdings today announced the conclusion of a strategic black economic empowerment (BEE) transaction to achieve three objectives: empower employees through the transfer of shares; make a significant contribution to the development of human capital mainly in the health care sector through the creation of the Discovery Foundation and achieve broad based empowerment of historically disadvantaged people through our partnership with the WDB Investment Holdings (WDB). In total, the new shareholders represent approximately 7% of Discovery Holdings" equity. This will bring Discovery"s total BEE shareholding, after accounting for the BEE shareholding in FirstRand, to just over 25%. This is in line with the requirements of the Financial Services Charter. Discovery employees will receive a total of 5 390 000 shares in Discovery which will vest in varying periods, depending on employees" level of seniority, commencing in two years time "We value people as our greatest asset, and we want to reward the contribution of our employees and recognize and encourage the contribution of black talent within Discovery," says Adrian Gore, CEO of Discovery "Further, we want to achieve true broad-based empowerment and we want to be involved with innovative and entrepreneurial partners who can contribute to Discovery"s growth," Gore says. At least 3% of Discovery"s shareholding will rest with WDB Investment Holdings (WDB), the investment arm of the group which generates income to be ploughed into the economic empowerment and upliftment of black rural-based women. "WDB is a shareholder with an institutional perspective, providing strategic guidance whilst acknowledging that operational issues rest in the hands of the Discovery management team," he says. WDB is also an entrepreneurial entity that understands that its investment in Discovery is for the long haul. "Also WDB has insight into the social issues which are facing our sector. They bring to Discovery this unique experience," Gore says. Gore adds that WDBIH offers Discovery the broad-based ownership that it desires, particularly with its emphasis on the upliftment of rural women. WDB Executive Director, Sonja Sebotsa, who has been nominated to serve as a non- executive member of the Discovery board, says: ""WDB is very pleased to partner with a market leader such as Discovery. We look forward to working with Discovery"s management team as they unlock further growth in South Africa and offshore including exploring growth opportunities in the lower income segments of our population." The BEE deal will also see the formation of The Discovery Foundation to invest in the education and training of black medical specialists in areas of need. The intention is to have focused and significant impact in an area of critical need in the heath sector. The Foundation will be capitalised through a combination of Discovery shares and initial operating capital, giving it access to between R100 million and R200 million over a period of ten years. Prominent businessman, Dr Vincent Maphai, who is chairman of BHP Billiton South Africa, will chair the Discovery Foundation and become a shareholder. He has been nominated to join Discovery"s board as non-executive director. Maphai said: "Discovery is a very successful company. It has the guts to change the rules of the game, has a strong management team and an unyielding desire to win. I respect the company and its leadership enormously. I am proud to be joining such a company." "We, WDBIH and I, are here to supplement each other with the leadership of this company. We are not here to replace each other. I am looking forward to that," he adds. Gore says Dr Maphai will add considerable gravitas and experience to the Discovery board and as a shareholder. "Vincent"s statesmanlike skills and experience will add considerably to Discovery"s skill base," says Gore. Gore says the decision to structure the shareholding in this way, and partner with WDBIH as its institutional BEE shareholder followed a rigorous process of selection. Importantly, the entire transaction will be at Holdings level, rather than at subsidiary level. This, says Gore, will mean that the empowerment shareholders will share in the full upside and risk of Discovery, and aligns all shareholders. "We feel this is a cleaner way of putting together a BEE deal," says Gore. "Our businesses are closely integrated, and in this way our BEE partners share the risk as well as the upside in all of our operations, including in the US and UK." Gore says however that the shareholding issue is only one aspect of Discovery"s transformation drive: "Discovery has made significant progress in meeting the other aspects of the Financial Services Charter, including employment equity and procurement," he says. Notes to editors: Discovery"s BEE transaction is driven by three guiding principles: The empowerment of Discovery"s people is an important component of the transaction, giving each Discovery employee shares in the company. The Discovery Foundation aims to bring about a significant change in the health care sector by investing in the education and training of black medical specialists in areas of need. The Foundation will be capitalised through a combination of Discovery shares and initial operating capital, giving it access of between R100-millon to R200 million over a period of ten years. Through investments in scholarships, bursaries and research fellowships, as well as through activities that provide direct support for teaching and research institutions involved in the training of medical specialists, the Foundation will increase significantly the number of specialists in South Africa. Importantly, all of these specialists will be previously disadvantaged individuals. Another important component of the Foundations" activities will be an investment in the training of black actuaries to the benefit of the South African insurance and health care environment. Broad based empowerment in partnership with the WDB Investment Holdings: The Women"s Development Bank Investment Holdings is an organisation that promotes the upliftment and development of women, specifically by investing in the micro business ventures of rural women. In terms of the empowerment transaction 3% of our shareholding will rest with WDB Investment Holdings (WDBIH), the investment arm of the group which generates income to be ploughed into the economic empowerment and upliftment of women. WDBIH is a long-standing BEE investment company, and brings with it an institutional framework and commercial expertise, enabling it to meaningfully participate in Discovery as a shareholder. Profile of Discovery"s partners The Women"s Development Bank Group encourages the upliftment of rural communities by developing woman entrepreneurs at grassroots level. They have a proven 13-year track record of support to women in South Africa"s poorest communities and through their micro-finance programme, have supported more than 8 000 micro enterprises with loans to the value of more than R30-million. Sonja Sebotsa, executive director of WDBIH, has been nominated to be appointed to the Discovery board as a non-executive director. She has a wealth of experience in investment and corporate finance issues and since 2002 has been responsible for investment transactions and investee relationships at the WDBIH. She holds a number of prestigious directorships and is the chairman of the audit committee at Adcorp. As the Chairman of the Discovery Foundation, a shareholder and new nominee non- executive Discovery board member, Dr Vincent Maphai, brings to Discovery his outstanding business acumen and a unique insight into the issues of transformation in the business environment. After a long and illustrious career as an academic, chairman of the Presidential Review Commission on the restructuring of the public sector, former executive director of the HSRC, director of corporate affairs at SAB and chairman of the SABC board, Dr Maphai is currently the chairman of BHPBilliton SA. (Ends) Issued by: Beachhead Media & Investor Relations (Lynette Lambert) tel no: 011 214 2406/084 580 2402/ lynette@bmsa.co.za (Rio Matlhaku) tel no: 011 214 2402/082 907 7943/rio@bmsa.co.za (Sheri Fine) tel no: 011 214 2414/082 785 6164/sheri@bmsa.co.za On behalf of: Adrian Gore CEO, Discovery Holdings Limited 011 529 2800 / 082 606 2800 Dr Vincent Maphai Tel: 012 460 6863/Cell no: 082 788 2500/email: Maphai@worldonline.co.za Ms Sonia Sebotsa Executive Director WDB Investment Holdings (Pty) Ltd Tel: (011) 341 9900/cell no: 082 372 1704/email: sonjas@wdbih.co.za Date: 13/09/2005 11:23:05 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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