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IDQ - Indequity Group Limited - Indequity Group Limited restructuring
Mon, 08 Feb 2010 17:30
IDQ
IDQ
IDQ - Indequity Group Limited - Indequity Group Limited restructuring
transaction details, notice of general meeting and removal of cautionary.
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
"Indequity" or "the Group" or "the company"
Share code: IDQ
ISIN: ZAE000016606
Indequity Group Limited restructuring transaction details, notice of general
meeting and removal of cautionary.
Background
Since the group`s
listing in 1998 its operations have been categorised into
three distinctive divisions namely: Investment Banking and Private Equity,
Investments and Insurance. The perceived synergies between the three divisions
were never really realised and even cross selling between the different client
bases did not materialise for a number of different reasons.
One of the main reasons for a company to remain listed is that it has access to
equity capital. The Insurance division will need capital as it grows and in
anticipation of future changes to license requirements in terms of its capital
adequacy requirements.
Having had a critical look at all the group`s operations and divisions it has
become clear that the other two divisions do not have the same capital
requirements and growth prospects as the Insurance division. In order to provide
focus and not confuse potential investors as
to what line of business they are
investing in, the controlling shareholders and the Board have considered it
appropriate to split the group into two sections. The Insurance division will
remain the only listed part with the rest of the divisions being unbundled into
a non-listed group.
The listed group
Indequity Group Limited ("IDQ") as a listed entity will in future only comprise
of Indequity Group Limited, Indequity Insurance Holdings Limited, Indequity
Specialised Insurance Limited and IDQ Nominees (Proprietary) Limited. This group
will continue to trade under the Indequity brand. Control of the group will
remain as before. The Board will remain as before except that TC Meyer will now
become a non-executive director.
The non-listed group
This new group of companies will be held by an existing limited company in the
Indequity group called Indequity (SA) Capital Limited ("Newco"). This group will
house all the remaining non insurance Indequity subsidiaries. This group will
trade under a new brand name, still to be determined. It is proposed that
Newco`s initial Board be made up by IDQ`s current Board members.
Restructuring details
Internal consolidation of IDQ`s non insurance subsidiaries
Newco, a wholly owned subsidiary of IDQ, will enter into an agreement with IDQ
to purchase the shares of the following IDQ subsidiaries ("non insurance
subsidiaries") for a cash consideration of R1,769,606:
Name of subsidiary Percentage Nature of business
currently held
by IDQ, and to
be sold to Newco
Indequity Capital Managers 100% The company carries on the
(Proprietary) Limited, business of investment
consultants.
Indequity International 100% Provider of financial
(Proprietary) Limited, services.
Indequity Insurance 100% Short term insurance broking.
Brokers (Proprietary)
Limited,
Alexecovet (Proprietary) Approximately The company is engaged in the
Limited 43% marketing of homeopathic
veterinary medicine and
products produced outside the
country and operates
principally in South Africa.
Indequity Investment 50% The company is engaged in a
Managers Limited, collective investment scheme
management and operates
principally in South Africa.
Cyan Communications 100% The company`s business and
(Proprietary) Limited operations are advertising
and communication services
for the Indequity Group.
Indequity Investment 1 57.14% The company is engaged in an
(Proprietary) Limited investment holding company
and operates principally in
South Africa.
from IDQ for a cash consideration of R1,769,606. The effective date would be
ratified as being 1 October 2009. This transaction is an internal transaction
within the IDQ group. The entire cash consideration will be set off against
inter-company loan accounts owed by IDQ to the Newco group.
All outstanding intergroup accounts between the listed and non listed groups are
to be settled in cash.
Dividend in specie
Newco (unlisted) will be distributed to current IDQ shareholders as a dividend
in specie. The dividend will be distributed as a reduction in IDQ`s share
premium account. Newco currently only has intergroup loan accounts and cash on
hand. Following the distribution the existing IDQ shareholders will also be
shareholders in Newco in exactly the same ratios as it holds IDQ shares (The NAV
of the dividend in specie distributed to Indequity shareholders is equal to 18,2
c per Indequity ordinary share).
The dividend in specie will be regarded as a specific payment to shareholders as
per the Johannesburg Stock Exchange ("JSE") Listings Requirements. Shareholders
of IDQ will receive one Newco share for every one IDQ share held on 19 March
2010.
A circular containing the details of the
specific payment to securities holders
("dividend in specie") will be sent to securities holders on or around 11
February 2010.
Conditions Precedent
All the corporate actions mentioned above will be inter-conditional upon each
other. The Restructuring will be subject to achieving the relevant shareholder
and regulatory approvals.
Pro forma financial effects
Before the After the Percentage
specific payment specific payment Change
to shareholders to shareholders
EPS 15.23 19.50 28.03%
HEPS 15.84 19.50 23.14%
NAV 108.1 89.9 -16.84%
NTAV 97.1 85.9 -11.53%
The figures presented above depict the pro forma financial effects for the
restructuring.
Notice of general meeting
Notice is hereby given that the general meeting of members of Indequity Group
Limited, at which the authority for the specific payment to shareholders will be
sought, will be held at the registered office, First Floor, Cascade House,
corner 14th Avenue and Hendrik Potgieter Road, Constantia Kloof, at 10:00 on
Thursday, 4 March 2010.
Important Dates and Times for the restructuring
Important dates for the specific payment to 2010
shareholders
Circular posted to shareholders on or around Thursday, 11 February
General meeting notice, posted to shareholders on Thursday, 11 February
or around
Results of general meeting announced Thursday, 4 March
Last day to trade "cum" the dividend in specie Friday, 12 March
"Ex" date Monday, 15 March
Record date Friday, 19 March
Pay date (specific payment to securities holders) Tuesday, 23 March
Removal of Cautionary
IDQ will no longer be under cautionary after the release of this announcement.
Johannesburg
8 February 2010
Sponsor
KPMG Services(Proprietary) Limited
Date: 08/02/2010 17:11:03 Produced by the JSE SENS Department.
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