Wrap Text
Old Mutual’s Broad-Based Black Economic Empowerment Transactions Mature
OLD MUTUAL PLC
ISIN CODE: GB00B77J0862
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSUER CODE: OLOMOL
Old Mutual plc
Ref 351/15
7 May 2015
OLD MUTUAL’S BROAD-BASED BLACK ECONOMIC EMPOWERMENT TRANSACTIONS
MATURE
Old Mutual plc (“Old Mutual” or “the Group”) today announces the maturity of its Broad-Based Black
Economic Empowerment transactions (“BEE transactions”) that to date have created net value of over
R7.9 billion, based on current market prices, for Old Mutual’s South African empowerment partners,
staff and communities (“BEE participants”).
The BEE transactions originally entered into by Old Mutual and Mutual & Federal Insurance Company
Limited (“M&F”), (collectively “Old Mutual South Africa”) during 2005, involved shares valued at R4.1
billion1, and representing approximately 13% of the equity value of Old Mutual’s South African
operations at the time, being issued to our BEE participants. The subscription terms for the shares
issued were designed to facilitate the ownership levels required under South African Broad-Based
Black Economic Empowerment legislation by enabling the BEE participants to benefit from the increase
in the Group’s value over ten years.
Our Black Business Partners (“BBPs”) included the WIPHOLD Consortium, the Brimstone Consortium
and Mtha, for whom a combined R2.1 billion in net value was created.
Old Mutual South Africa staff also benefited through various employee share trusts that formed part of
the BEE transactions, creating net value of R4.6 billion for around 9,000 management and employees.
The Group further undertook to support the development and growth of emerging financial advisors and
brokers through the Old Mutual Black Distributors Trust and M&F Black Broker Trust. In addition, the
Old Mutual Education Trust provides scholarships for higher education to members and staff of the
participating trade unions, and their dependants. The M&F Community Trust focused on micro
enterprise development, education and skills capacity building, as well as social development and
welfare projects. Collectively, these trusts delivered a net value in excess of R1.2 billion, of which R925
million is available for future distributions to qualifying beneficiaries.
The aggregate value that remains within these trusts will continue to be used to support and develop
critical transformation initiatives.
Financial impact
The process of unwinding the BEE transactions includes settlement of the balance of the cash
undertakings given by certain of the BEE participants when the shares were originally issued. This
totals R3.2 billion (c. £175 million) as at 30 April 2015. Of this, R1.7 billion has already been received by
the Group, with the balance expected to be received by the end of June 2015. The proceeds will result
in an increase in the net assets of the Group of R3.2 billion (c. £175 million) and will be included in the
Group’s Financial Group Directive (“FGD”) calculations at the half year.
1including M&F shares that were replaced by Old Mutual plc shares when M&F became a wholly-
owned subsidiary of the Group
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There is no impact on the Group’s Adjusted Operating Profit per share (known as “AOP Earnings per
share”) as a result of the maturity of these BEE transactions. However, if the maturity of these BEE
transactions had taken place on 1 January 2015, then there would be a pro-forma dilution of
approximately 2.7% to IFRS Basic Earnings per share and Headline Earnings per share following the
sale/transfer of approximately 125 million Old Mutual plc shares.
Patrick O’Sullivan, Chairman of Old Mutual, said: “We are clear about the role we play in society and
our responsibility to help drive positive change. We are pleased that our BEE transactions have
contributed positively to improving the quality of lives of communities across South Africa.”
Old Mutual remains committed to ongoing transformation and development of South Africa through our
focus on investment in socially responsible projects, BEE funding, infrastructure investment and support
of education initiatives.
The Group has announced its future plans regarding the BEE schemes on the Old Mutual South Africa
website:
http://www.oldmutual.co.za/about-us/media-centre/press-releases.aspx
Enquiries
External communications
Patrick Bowes UK +44 20 7002 7440
Investor relations
Dominic Lagan UK +44 20 7002 7190
Sizwe Ndlovu SA +27 11 217 1163
Media
William Baldwin-Charles +44 20 7002 7133
+44 7834 524833
Sponsor:
Merrill Lynch South Africa (Pty) Ltd
Joint Sponsor:
Nedbank Capital
Notes to Editors
Old Mutual provides investment, savings, insurance and banking services to more than 17 million customers in
Africa, the Americas, Asia and Europe. Originating in South Africa in 1845, Old Mutual has been listed on the
London and Johannesburg Stock Exchanges, among others, since 1999.
In the year ended 31 December 2014, the Group reported adjusted operating profit before tax of £1.6 billion (on an
IFRS basis) and had £319 billion of funds under management from core operations.
For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com
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