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JSE
RMI
RMI - Rand Merchant Insurance Holdings Limited - Abridged pre-listing
statement
RAND MERCHANT INSURANCE HOLDINGS LIMITED
(formerly Main Street 796 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2010/005770/06)
JSE Ordinary share code: RMI ISIN: ZAE000153102
("RMI Holdings" or the "Company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to the listing of all of RMI
Holding`s issued ordinary shares with a par value of R0.0001 each ("ordinary
shares") on the main board of the securities exchange operated by the JSE
Limited ("JSE") with effect from the commencement of business on Monday, 7
March 2011 (the "Listing Date"). RMB Holdings Limited ("RMBH") will unbundle
its ordinary shareholding in RMI Holdings to RMBH ordinary shareholders who
hold RMBH ordinary shares on Friday, 4 March 2011.
RMBH issued a circular to shareholders on Thursday, 3 February 2011,
regarding the RMBH restructuring (the "RMBH circular"). On the same day,
RMI Holdings issued a pre-listing statement relating to the listing of its
ordinary shares in the "Investment Instruments" sub-sector of the main board
of the JSE (the "RMI Holdings pre-listing statement"). The information in
this abridged pre-listing statement has been extracted from the RMI Holdings
pre-listing statement and the RMBH circular.
This abridged pre-listing statement does not constitute an offer to the
public (as defined in the South African Companies Act, no. 61 of 1973 (as
amended)) to purchase or subscribe for shares, but is issued in compliance
with the Listings Requirements of the JSE for the purpose of providing
information to the public with regard to RMI Holdings.
1. Overview of the RMBH restructuring
RMBH shareholders are referred to the RMBH circular and the RMI Holdings pre-
listing statement which contained, inter alia, information regarding the
following:
- the issue of shares for cash to Royal Bafokeng Holdings (Proprietary)
Limited ("Royal Bafokeng") (the "Royal Bafokeng Placement");
- the acquisitions by RMBH of additional ordinary shares in FirstRand
Limited ("FirstRand") from Financial Securities Limited ("FSL"), a wholly-
owned subsidiary of Remgro Limited, in exchange for the issue of new RMBH
ordinary shares, thereby increasing RMBH`s holding in FirstRand to c.33.9%
("First FirstRand Acquisition" and "Second FirstRand Acquisition");
- the separation of RMBH`s insurance and banking interests, through the
transfer of RMBH`s insurance interests to a newly incorporated wholly-owned
subsidiary of RMBH, RMI Holdings (the "RMBH Insurance Interests
Acquisition");
- the unbundling of RMBH`s shareholding in RMI Holdings to RMBH`s
ordinary shareholders and the separate listing of RMI Holdings on the JSE
Limited as an insurance-focused investment entity (the "RMI Holdings
Unbundling");
- the subsequent acquisition by RMI Holdings of additional ordinary
shares in MMI Holdings Limited ("MMI Holdings") from FSL, in exchange for
the issue to FSL of new RMI Holdings ordinary shares, increasing RMBH`s
holding in MMI Holdings to c.24.4% (the "MMI Holdings Acquisition"); and
- the acquisition by RMI Holdings of FirstRand`s 45% interest in
FirstRand STI Holdings Limited ("OUTsurance") (the "OUTsurance
Acquisition")
collectively hereinafter referred to as the "RMBH Restructuring".
RMBH shareholders have been advised that the Royal Bafokeng Placement was
successfully implemented on 9 February 2011. RMBH shareholders were further
advised that all of the resolutions required to implement the RMBH
Restructuring were duly approved by the requisite majorities at the general
meeting of RMBH shareholders held on 18 February 2011. As such, all the
conditions precedent to the First FirstRand Acquisition, Second FirstRand
Acquisition, RMBH Insurance Interests Acquisition, RMI Holdings Unbundling
and the MMI Holdings Acquisition (other than those conditions requiring any
other of the transactions to be implemented first) have now been fulfilled.
The Competition authorities of South Africa and the Namibian Registrar of
Short-Term Insurance have approved the OUTsurance Acquisition.
Consequently, the only outstanding condition precedent to the OUTsurance
Transaction (which will be the final step in the RMBH Restructuring) is the
approval thereof by the South African Registrars of Short-Term and Long-Term
Insurance.
2. Rationale for the RMI Holdings Listing
The RMBH restructuring will result in the creation of separate focused
insurance and banking entities.
The two separately listed entry points will provide investors with greater
flexibility in terms of their investment choices:
Investors in RMBH will have access to a strategic investment in a premier
Southern African banking group, owning pre-eminent banking brands that
control significant elements of the profit pools of their segments; while
Investors in RMI Holdings will have access to a strategic portfolio of
insurance investments with significant shares in the profits of various
segments of the insurance market. All the companies which will form part of
the RMI Holdings portfolio are quality investments that excel in their own
segments of the insurance market.
3. Overview of RMI Holdings
RMI Holdings will be a listed insurance investment entity holding a 25%
interest in the ordinary shares of Discovery Holdings Limited ("Discovery"),
a 90% interest in the ordinary shares of OUTsurance, a 76% interest in the
ordinary shares of RMB-SI (Proprietary) Limited (RMB-SI") and a 24% interest
in the ordinary shares of MMI Holdings. The details of these investments
are:
3.1 Discovery
Discovery is an integrated financial services organisation that operates in
health insurance, life assurance, investment and health and wellness
markets. Discovery operates in South Africa, the United Kingdom, China and
the United States in the consumer-engaged health insurance, consumer-engaged
life assurance and the investment and long-term savings markets.
3.2 OUTsurance
OUTsurance is the holding company of a group which conducts short-term and
long-term insurance activities. Direct short-term insurance activities are
conducted through direct insurers OUTsurance Insurance Company Limited, Youi
(Proprietary) Limited (an Australian subsidiary) and OUTsurance Namibia
Insurance Company Limited (a joint venture with FNB Namibia Holdings
Limited). Intermediated short-term insurance is provided by Momentum Short-
Term Insurance Limited, a joint venture with MMI Holdings. The short-term
insurance offering includes personal and commercial (South Africa only)
products. OUTsurance Life Insurance Company Limited provides long-term
insurance products direct to the South African public. The growth of
OUTsurance can be attributed to a scientific approach to risk selection
together with superior claims management and innovative product design.
3.3 RMB-SI
RMB-SI provides a comprehensive range of tailored solutions to select
clients in the short-term and long-term insurance sector. RMB-SI`s business
model is based on structured business products, underwriting managers and
affinity business.
3.4 MMI Holdings
MMI Holdings is a leading insurance-based financial services group
conducting business in South Africa and elsewhere in Africa. The business of
MMI Holdings consists of life insurance, healthcare administration, asset
management, short-term insurance and employee benefits.
Following the implementation of the RMBH Restructuring, RMI Holdings will,
amongst other things, own approximately 24.4% of the ordinary shares in MMI
Holdings. RMI Holdings intends to increase its stake in MMI Holdings to over
25% in order to prevent potential structural value traps.
4. Prospects
The directors are positive about RMI Holdings` growth prospects in South
Africa, Africa and internationally. RMI Holdings anticipates a modest return
to growth in the South African economy in 2011, driven by further investment
by South African Government and some improvement in consumption levels.
Through creating a focused entity with a suite of significant investments in
South Africa`s pre-eminent insurance brands, the RMBH Restructuring should
provide benefit to RMI Holdings shareholders.
5. Investment policy
The main investment criteria for RMI Holdings for new investments can be
described as classical "value investing" principles, namely:
RMI Holdings will seek to invest in established businesses with
demonstrated, consistent earning power, mainly in the financial services
sector. It is unlikely that RMI Holdings will invest in turnaround or
greenfield situations;
RMI Holdings intends to invest in businesses with first class management
teams, who should also hold a significant stake in the business, as RMI
Holdings aims to enter into long-term partnerships with the management
groups.
It is intended that RMI Holdings will fund its investments through a
combination of debt and equity.
6. Directors
The names, ages, nationalities, business addresses and functions of the
directors of RMI Holdings are set out below. On the Listing Date, the board
will comprise:
Name Business Address Occupation/Function
Executive directors
Peter Cooper (55) 3rd Floor, Chief Executive
South African 2 Merchant Place, Officer and
Corner Fredman Drive Financial Director
and Rivonia Road,
Sandton,
2196
Non-executive directors
Gerrit Thomas Ferreira (62) 3rd Floor, Non-executive
South African Old College Building, Chairman
35 Church Street,
Stellenbosch,
7600
Lauritz Lanser Dippenaar 4th Floor, Director / Director
(62) 4 Merchant Place, of companies
South African Corner Fredman Drive
and Rivonia Road,
Sandton,
2196
Jan Willem Dreyer (60) * Carpe Diem Office Park, Director / Director
South African Quantum Road, of companies
Techno-Park,
Stellenbosch,
7600
Jan Jonathan Durand (44) Carpe Diem Office Park, Director / Director
South African Quantum Road, of companies
Techno-Park,
Stellenbosch,
7600
Patrick Maguire Goss (62) * 15 Suffert Street, Director / Director
South African Pinetown, of companies
3600
Paul Kenneth Harris (61) 3rd Floor, Director / Director
South African 2 Merchant Place, of companies
Corner Fredman Drive
and Rivonia Road,
Sandton,
2196
Sonja Emilia Ncumisa Sebotsa 1st Floor, Director / Director
(39) * 22 Oxford Road of companies
South African (entrance off
Federation Road),
Parktown,
2193
Khehla Cleopas Shubane (54) 14 Cole Street, Director / Director
* Kensington, of companies
South African 2094
Matthys Hendrik Visser (56) Carpe Diem Office Park, Director / Director
South African Quantum Road, of companies
Techno-Park,
Stellenbosch,
7600
Notes:
* Independent director
7. Salient dates and times
2011
Release of the abridged RMI Holdings pre- Monday, 21
listing statement on SENS on February
Issue and listing of new RMBH ordinary shares Tuesday, 22
in terms of the First FirstRand Acquisition on February
Release of the abridged RMI Holdings pre- Tuesday, 22
listing statement in press on February
Expected date of fulfilment or waiver (where Tuesday, 22
applicable) of the conditions precedent to the February
RMI Holdings Unbundling on
Last day to trade in dematerialised RMBH Friday, 4 March
ordinary shares on the JSE in order to
participate in the RMI Holdings Unbundling on
RMBH ordinary shares trade ex the entitlement Monday, 7 March
to the unbundled RMI Holdings ordinary shares
on
Listing of unbundled RMI Holdings ordinary Monday, 7 March
shares with effect from the commencement of
business under the JSE code: RMI, ISIN:
ZAE000153102 and abbreviated name RMIH on
Commencement of trade in RMI Holdings ordinary Monday, 7 March
shares on
Record date for RMBH ordinary shareholders to Friday, 11 March
participate in the RMI Holdings Unbundling on
Expected date of fulfilment or waiver (where Monday, 14 March
applicable) of the conditions precedent to the
Second FirstRand Acquisition and the MMI
Holdings Acquisition on
RMI Holdings share certificates posted by Monday, 14 March
registered post to certificated RMBH ordinary
shareholders on or about
Dematerialised RMBH ordinary shareholders have Monday, 14 March
their accounts at their CSDP or brokers
updated with their unbundled RMI Holdings
ordinary shares on
Listing of new RMBH ordinary shares to be Wednesday, 16
issued in terms of the Second FirstRand March
Acquisition on
Listing of new RMI Holdings ordinary shares to Wednesday, 16
be issued in terms of the MMI Holdings March
Acquisition on
Operative date for the Second FirstRand Wednesday, 16
Acquisition and MMI Holdings Acquisition on March
Announcement of specified ratio in respect of Wednesday, 16
the apportionment of the cost / base cost for March
taxation / CGT purposes on or about
Expected date of fulfilment or waiver (where Friday, 15 April
applicable) of the conditions precedent to the
OUTsurance Acquisition on
Operative date for the OUTsurance Acquisition Friday, 29 April
on
Any material change to the above dates will be released on SENS and
published in the press.
8. Share capital
At the Listing Date, the authorised share capital of RMI Holdings will
comprise 2,000,000,000 ordinary shares and 100,000,000 preference shares,
both having a par value of R0.0001, and the issued share capital of RMI
Holdings will comprise approximately 1 361 576 456 fully paid ordinary
shares only. RMI Holdings` total share premium at the Listing Date will be
approximately R9,795,864,000. As at the Listing Date no ordinary or
preference shares will be held by RMI Holdings or its subsidiaries as
treasury shares. All ordinary shares that are in issue at the Listing Date
will rank pari passu in all respects.
9. Copies of the pre-listing statement
Copies of the pre-listing statement are available in English only, which
copies may be obtained during normal business hours from Monday, 21 February
2011 until Monday, 7 March 2011 from RMI Holdings, Rand Merchant Bank and
Computershare Investor Services (Proprietary) Limited, at their respective
physical addresses which appear below:
The registered office of RMI The office of Rand Merchant
Holdings: Bank:
3rd Floor, 2 Merchant Place 1 Merchant Place,
Corner Fredman Drive and Rivonia Corner Fredman Drive and
Road Rivonia Road
Sandton, 2196 Sandton, 2196
South Africa South Africa
The office of Computershare
Investor Services(Proprietary)
Limited
Ground Floor
70 Marshall Street
Johannesburg
2001
South Africa
Johannesburg
21 February 2011
Merchant bank and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal advisors
Webber Wentzel
Competition law advisors
Werksmans Inc
Independent sponsor
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Independent expert
KPMG Services (Proprietary) Limited
Independent reporting accountants and auditors
PwC Inc
Date: 21/02/2011 16:21:00 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS. |
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