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MVG/MVGP - Mvela Group Limited - Disposal of further Life Healthcare Group
Holdings Limited ("Life Healthcare") shares
Mvela Group Limited
Incorporated in the Republic of South Africa
Registration number: 1995/004153/06
Ordinary share code: MVG
Preference share code: MVGP
Ordinary share ISIN: ZAE000060737
Preference share ISIN: ZAE000073540
("Mvela Group" or "the Company")
DISPOSAL OF FURTHER LIFE HEALTHCARE GROUP HOLDINGS LIMITED ("LIFE HEALTHCARE")
SHARES
1. INTRODUCTION
Shareholders of Mvela Group are advised that the Company has disposed of a
further 5,435,377 Life Healthcare ordinary shares ("Life Healthcare shares") on
the JSE Limited ("JSE") open market during the period 6 April 2011 to 4 July
2011 ("the open market disposal") for a total cash consideration of
approximately R91,3 million.
It was announced on 7 April 2011 that Mvela Group disposed of 12 million Life
Healthcare shares for a total cash consideration of approximately R184,7 million
("the initial disposal").
To date 17 435 377 Life Healthcare shares have been disposed by the Company and
its remaining investment in Life Healthcare after the open market disposal
amounts to 16,949,903 or 1.63% of the total issued Life Healthcare shares.
2. RATIONALE
The disposal is part of Mvela group`s overall unlocking strategy to realise
value for its shareholders. The sale proceeds have been utilised to pay down
certain debt of portfolio companies and a Capital Gains Tax ("CGT") obligation
of R46,8 million arising from the unbundling of the Life Healthcare shares.
3. CONSIDERATION RECEIVED
The total cash consideration received in respect of the open market disposal is
approximately R91,1 million net of all transaction costs.
4. JSE CATEGORISATION
In terms of the JSE Listings Requirements, the aggregation of the open market
disposal and the initial disposal is categorised as a category 2 transaction.
5. FINANCIAL EFFECTS
The unaudited pro forma financial effects of the initial disposal and the open
market disposal (collectively the "Disposals") set out below have been prepared
to assist Mvela Group shareholders in assessing the impact of the Disposals on
the Company`s historical earnings per share ("EPS"), headline earnings per
ordinary share ("HEPS"), net asset value per ordinary share ("NAVPS") and net
tangible asset value per ordinary share ("NTAVPS"). The pro forma financial
effects are the responsibility of the directors of Mvela Group and are provided
for illustrative purposes only.
The pro forma financial effects have been prepared on the basis that the
Disposals had been fully implemented on 1 July 2010 for Income Statement
purposes and as at 31 December 2010 for purposes of the Statement of Financial
Position. The pro forma financial effects do not purport to be indicative of
what the consolidated financial results would have been had the Disposals been
implemented on a different date. The material assumptions are set out in the
notes following the table.
Due to their nature, the pro forma financial effects may not fairly present the
financial position, changes of equity, results of operations or cash flows of
Mvela Group after the Disposals.
The net value of and the after tax profits attributable to the net assets of
Life Healthcare are R228,667,954 and R33,467,865, respectively.
Before the After the % change
Disposals(1) Disposals
EPS (cents) (53.6) (53.6) 0%
HEPS (cents) (0.7) (0.6) 14.29%
NAVPS (cents) 359.2 368.5 2.59%
NTAVPS (cents) 359.2 368.5 2.59%
Weighted average number of 458,467 458,467 0%
shares in issue * (`000)
Net number of ordinary shares 565,474 565,474 0%
in issue (`000)
*excludes treasury shares
Notes:
1. Extracted from Mvela Group`s published unaudited interim results for six
months ended 31 December 2010.
2. R228,2 million of the proceeds received from the Disposals have been
used to reduce interest bearing debt of portfolio investments.
3. R46,8 million of the proceeds received from the open market disposal
will be used to pay down CGT obligations.
4. Interest paid has been reduced by R6,1 million as a result of the
disposal proceeds applied to interest bearing debt. Taxation of R2,4
million claimed in respect of this has been reversed.
5. A profit on the Disposals of R33,5 million has been recognised being the
difference between the fair value of Life Healthcare shares at 1 July
2010 of R13.55 per share and the net proceeds received on the Disposals
of R275 million.
6. A deferred taxation liability of R27,065,419 as at 1 July 2010 has been
set off against the CGT incurred on the profit from Disposals.
7. The fair value adjustment of R22,728,397 less CGT of R3,181,976 provided
for the six months ended 31 December 2010 have been reversed.
8. The pro forma financial effects have been prepared using the same
accounting policies as those applied in the most recently published
annual financial statements of Mvela Group.
Johannesburg
8 July 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 08/07/2011 17:37:02 Supplied by www.sharenet.co.za
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