Listed South African banking group Standard Bank and associated financial services group Liberty Group have announced that they have concluded agreements which will see an effective 10% of Standard Bank’s South African banking operations and 10% of Liberty Life’s South African operations go to broad-based black groupings.
These groupings include Safika Holdings, which was founded by Moss Ngoasheng and Vuli Cuba, and Cyril Ramaphosa’s Millennium Consolidated Investments (MCI), collectively known as the Tutuwa Consortium, which will acquire approximately 40,2-million shares in the issued ordinary share capital of Standard Bank and 10,3-million Liberty Life ordinary shares.
Standard Bank and Liberty Life said that both companies comprising the Tutuwa Consortium were founded by prominent black individuals who were influential in driving South Africa’s democratic process in the early 1990.
These individuals have established themselves as businessmen with proven track records.
Safika is an empowerment investment holding company with investments in the fields of communication, information technology, human capital, natural resources and financial services.
Safika currently partners Liberty Life in Stanlib Limited, where it leads a consortium that holds an interest of 25,2% in Stanlib.
Liberty Life and Standard Bank Group are in advanced discussions to acquire a 20% strategic shareholding in Safika. This acquisition is not linked to the black ownership initiative.
Trusts will also be formed for the benefit of black employees of Standard Bank and Liberty Life.
Trusts will also be formed for the benefit of business and community groupings in the case of Standard Bank and, in the case of Liberty Life, for the benefit of various black educational and other empowerment groupings.
Standard Bank has proposed to facilitate the black ownership initiative through the acquisition of Standard Bank ordinary shares from shareholders.
In terms of this, Standard Bank ordinary shareholders will dispose of 76 ordinary shares for every 1,000 ordinary shares held in Standard Bank, at an ex-dividend consideration of R40,50 per Standard Bank ordinary share. This represents a discount of 4,71% to the Standard Bank closing share price on Friday, July 9 of R42,50.
Standard Bank said that this discount, amounting to an effective cost of 15 cents per share to the Standard Bank ordinary shareholders, is important for the sustainability of the black ownership initiative.
Standard Bank ordinary shareholders will retain the right to receive any interim dividend to be paid by Standard Bank in the 2004 financial year in respect of the ordinary shares disposed of to facilitate the black ownership initiative.
On implementation of the black ownership initiative, the black partners will together effectively hold approximately 100,5-million Standard Bank ordinary shares whose value, together with the value of the Andisa Capital empowerment transaction previously concluded, is equivalent to 10% of Standard Bank’s South African banking operations.
Liberty Life is to propose a scheme of arrangement that will result in four wholly-owned subsidiaries of Liberty Life, the empowerment subsidiaries, acquiring in aggregate 9,4% of the issued share capital of Liberty Life pro rata from all existing Liberty Life shareholders for a cash consideration of R48,50.
It has entered into a set of agreements and will enter into further agreements with the black partners, in terms of which the black partners will acquire all of the ordinary shares in the empowerment subsidiaries, thereby acquiring beneficial ownership of Liberty Life shares representing 10% of the value of the South African operations of Liberty Life.
As a result of the black ownership initiative, each Liberty Life shareholder will dispose of 94 shares for every 1Â 000 Liberty Life shares held, at a price of 48.50 rand per Liberty Life share.
As in the case with Standard Bank, current shareholders will retain the right to receive any dividend to be paid by Liberty Life in respect of the first half of 2004.
On implementation of the black ownership initiative, the black partners will hold approximately 25,8-million Liberty Life shares, representing 10% of the value of Liberty Life’ s South African operations.
The transactions are subject to shareholder and regulatory approval. — I-Net Bridge