TIDMOMU
RNS Number : 8925C
Old Mutual Limited
23 June 2021
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
LSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or "the Company")
Ref 16/21
23 June 2021
UNBUNDLING BY OLD MUTUAL OF A PORTION OF ITS SHAREHOLDING IN
NEDBANK GROUP LIMITED
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR
ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS
ANNOUNCEMENT.
This announcement does not constitute an offer or form part of
any offer or invitation to purchase, subscribe for, sell or issue,
or a solicitation of any offer to purchase, subscribe for, sell or
issue, any securities (whether pursuant to this announcement or
otherwise) in any jurisdiction, including an offer to the public or
section of the public in any jurisdiction. This announcement does
not comprise a prospectus.
DIVID DECLARATION
The board of directors ("Board") of Old Mutual is pleased to
announce that Old Mutual will, subject to obtaining all requisite
regulatory approvals, including Prudential Authority approval,
unbundle a portion of its shareholding ("Nedbank Stake") in the
issued ordinary share capital of Nedbank Group Limited ("Nedbank")
to the ordinary shareholders of Old Mutual ("Shareholders"). Old
Mutual will unbundle all the Nedbank ordinary shares currently held
by Old Mutual Emerging Markets Limited (being 62,131,692 Nedbank
ordinary shares and comprising 12.2% of the issued ordinary share
capital of Nedbank) to Shareholders by way of a distribution in
specie in terms of section 46(1)(a)(ii) of the Companies Act No. 71
of 2008 (the "Unbundling").
Overview and rationale of the Unbundling
Following conclusion of Old Mutual's managed separation process
in 2018, Old Mutual retained a minority shareholding in Nedbank
which represents c.19.4% of the Nedbank ordinary shares currently
in issue. This level of the Nedbank Stake was determined through
discussions with Nedbank and the relevant regulators at the time in
order to, amongst other things:
- ensure cohesive alignment with the ongoing arms' length
commercial arrangements between Old Mutual and Nedbank; and
- support the capital structure of the Old Mutual group (the
"Group"), in particular within Old Mutual Life Assurance Company
(South Africa) Limited ("OMLACSA"), whilst implementing changes
required by the Insurance Act which took effect from 1 July
2018.
Old Mutual was committed to being a significant minority
shareholder of Nedbank (with the right to nominate a director to
the boards of Nedbank and Nedbank Limited) whilst retaining a right
to review the Nedbank Stake as appropriate from time to time, in
accordance with the protocols outlined in the relationship
agreement concluded between Nedbank and Old Mutual on 19 April
2018.
Following an internal review of the Nedbank Stake, the Board
believes that it is in the best interests of Shareholders to
dispose of a majority of its Nedbank stake through the Unbundling,
as this:
- simplifies the Group, allowing investors to focus on the core operations of Old Mutual;
- allows Shareholders to participate more directly in the
differentiated investment cases of Old Mutual and Nedbank; and
- provides a substantial return of capital to Shareholders.
The remaining Nedbank Stake, held by OMLACSA (comprising c.7.2%
of the Nedbank ordinary shares currently in issue) continues to
support the capital structure of OMLACSA and will be optimally
managed in line with the Group's Financial Management
Framework.
Each Shareholder will receive Nedbank ordinary shares (which are
listed on the Johannesburg Stock Exchange and the Namibian Stock
Exchange) in the ratio illustrated below:
For every => 1.31954
100 Old Mutual Nedbank
Ordinary Ordinary
Shares Shares
The distribution of Nedbank ordinary shares to Shareholders
could result in recipients receiving fractional entitlements to
Nedbank ordinary shares. For example, if you hold 100 Old Mutual
ordinary shares, you will receive 1 Nedbank ordinary share and a
fractional entitlement to 0.31954 of a Nedbank ordinary share. Such
fractional entitlements will be sold in the market in accordance
with the Listings Requirements of the Johannesburg Stock Exchange,
with the proceeds of the sale ("Cash Proceeds") being paid to the
relevant Shareholders. Shareholders on Old Mutual's Namibian share
register, Malawian share register, UK share register and Zimbabwean
share register will be paid the local currency cash equivalents of
the Cash Proceeds. The Cash Proceeds will be converted to local
currency at the effective rate quoted by Old Mutual on or before
the date upon which payment of the Cash Proceeds is made to the
relevant Shareholders ("Applicable Rate").
The Unbundling will be implemented in accordance with the
provisions of Old Mutual's memorandum of incorporation.
NEDBANK
Nedbank is a diversified financial services provider offering a
wide range of wholesale and retail banking services, as well as
insurance, asset management and wealth management solutions. It
delivers its products and services through four main business
clusters: (i) Nedbank Corporate and Investment Banking, (ii)
Nedbank Retail and Business Banking, (iii) Nedbank Wealth and (iv)
Nedbank Africa Regions.
Nedbank ranks as a top-5 bank by capital on the African
continent and Ecobank Transnational Incorporated (Ecobank), in
which Nedbank holds a 21% shareholding, ranks within the top-10
banks by assets on the African continent. Nedbank is South Africa's
fifth-largest bank by market capitalisation and fourth largest by
total assets and headline earnings. It is a leading corporate bank
and a market leader in commercial property and renewable energy
finance and has a strong position in household motor finance,
household deposits and card acquiring. It operates a unique asset
management model as part of an integrated wealth management
business. Through its pan-African banking alliance with Ecobank,
Nedbank provides its customers access to Africa's widest banking
network.
For further information on Nedbank, Shareholders are referred to
Nedbank's public disclosures. Nedbank's public disclosures are not
part of this announcement and are not incorporated by reference
herein.
Tax considerations
The tax consequences of the Unbundling applicable to
Shareholders will depend on the individual circumstances of each
Shareholder. Accordingly, Shareholders are advised to obtain
independent tax advice in relation to the tax consequences (if any)
of the Unbundling on them.
Shareholders are advised that the Board has resolved to give
effect to the distribution in specie of the Nedbank ordinary shares
on the basis that:
- the distribution to South African corporate shareholders (as
contemplated in section 64F(1)(a) of the Income Tax Act 58 of 1962
(that is "a company which is a resident" for tax purposes in South
Africa) (referred to as "SA Corporate Shareholders")) shall be paid
as a dividend in specie; and
- the distribution to all other Shareholders (i.e. South African
tax resident individuals and trusts as well as non-South African
tax resident ordinary shareholders) shall be paid as a return of
capital out of Old Mutual's contributed tax capital,
provided that should any requirement be imposed on Old Mutual
pursuant to a change in relevant South African tax legislation
prior to the date of publication of the finalisation announcement,
which is expected to be published before 11.00 a.m. (South African
time) on or about Tuesday, 26 October 2021 ("Finalisation
Announcement") that would require all Shareholders within the same
class of shares to share equally in the allocation of contributed
tax capital as a result of any distribution , then the Board has
resolved that the distribution in specie shall be treated as a
return of capital out of Old Mutual's contributed tax capital for
all Shareholders.
SA Corporate Shareholders who receive the distribution as a
dividend in specie are exempt from dividends tax and will obtain a
base cost equivalent to the market value of the unbundled Nedbank
ordinary shares on the Unbundling distribution date, expected to be
on or about Monday, 8 November 2021 ("Unbundling Distribution
Date").
All other Shareholders who receive the distribution as a return
of capital will be required to reduce the base cost of their Old
Mutual ordinary shares by the market value of the unbundled Nedbank
ordinary shares on the Unbundling Distribution Date. The base cost
of the unbundled Nedbank ordinary shares would be equivalent to the
market value of the unbundled Nedbank ordinary shares on the
Unbundling Distribution Date. Note if the tax legislation changes
and the distribution to all Shareholders is made out of contributed
tax capital, then the SA Corporate Shareholders would also be
required to reduce the base cost of their Old Mutual ordinary
shares by the market value of the unbundled Nedbank ordinary shares
on the Unbundling Distribution Date.
A summary of the tax consequences of the Unbundling for
Shareholders will be included in the Finalisation Announcement.
EXCHANGE CONTROL CONSIDERATIONS AND MANNER OF DELIVERY OF THE
NEDBANK SHARES
A summary of the exchange control considerations and the manner
in which the unbundled Nedbank ordinary shares will be delivered to
or for the benefit of Shareholders will be included in the
Finalisation Announcement.
Salient dates and times
Subject to Old Mutual having obtained all requisite regulatory
approvals, the Unbundling will take place at 9:00 a.m. (SA time) on
Monday, 8 November 2021. Set out below are the indicative dates and
times (South African standard time unless otherwise stated)
applicable to the Unbundling. All dates and times below are subject
to change and any changes will be published on the Johannesburg
Stock Exchange's ("JSE") Stock Exchange News Service ("SENS"), the
London Stock Exchange's Regulatory News Service ("RNS") and the
news services of the Malawi Stock Exchange ("MSE"), the Namibian
Stock Exchange ("NSE") and the Zimbabwe Stock Exchange ("ZSE").
Event Date and time
(2021)
Finalisation Announcement expected to be published 11.00 a.m. on Tuesday,
at 26 October
Expected last day for transfers between the Tuesday, 26 October
SA share register, UK share register, Namibian
share register, Malawian share register and
Zimbabwean share register in order to participate
in the Unbundling
Expected last day to trade on the SA share Tuesday, 2 November
register, Namibian share register, Malawian
share register and Zimbabwean share register
in order to participate in the Unbundling
Expected last day to trade on the UK share Wednesday, 3 November
register in order to participate in the Unbundling
Old Mutual ordinary shares expected to trade Wednesday, 3 November
"ex" entitlement on the SA share register,
Malawian share register, Namibian share register
and Zimbabwean share register in order to receive
the unbundled Nedbank ordinary shares
Old Mutual ordinary shares expected to trade Thursday, 4 November
"ex" entitlement on the UK share register to
receive the unbundled Nedbank ordinary shares
Announcement expected regarding the Cash Proceeds 11.00 a.m. on Thursday,
and the Applicable Rate in respect of fractional 4 November
entitlements published at
Expected record date 12.00 p.m. on Friday,
5 November
Expected transfers between share registers 09.00 a.m. on Monday,
opened at the commencement of trade at 8 November
Unbundling expected to be implemented at 09.00 a.m. on Monday,
8 November
Shareholders' accounts at CSDP or broker expected Monday, 8 November
to be updated and credited on
Share certificates in respect of unbundled Thursday, 11 November
Nedbank ordinary shares expected to be despatched
on
Notes:
1. Shareholders should anticipate their holdings of Old Mutual
ordinary shares at the record date and time by taking into account
all unsettled trades concluded on or before the last day to trade
which are due to be settled on or before the record date and
time.
2. Share certificates may not be dematerialised or
rematerialized between Wednesday, 3 November 2021 and Friday, 5
November 2021, both days inclusive.
Old Mutual POST the Unbundling
The Group's Nedbank Stake currently comprises approximately
19.4% of the issued ordinary share capital of Nedbank, as held in
the Group's shareholder funds. Net of the Unbundling, the Group
will hold 36,781,960 ordinary shares in Nedbank, constituting c.
7.2% of the current issued ordinary share capital of Nedbank (which
will be held by OMLACSA in its shareholder funds).
Old Mutual ordinary shares in issue as at the date of
declaration of the Unbundling: 4,708,553,649
Old Mutual income tax number: 9267358233
Financial Advisor
Merrill Lynch South Africa (Pty) Limited t/a BofA Securities
Sponsors
Johannesburg Stock Exchange Merrill Lynch South Africa (Pty) Limited
t/a BofA Securities
Namibia PSG Wealth Management (Namibia) (Proprietary)
Limited
Malawi Stockbrokers Malawi Limited
Zimbabwe Imara Capital Zimbabwe plc
Enquiries
Investor Relations
Sizwe Ndlovu T: +27 (0)11 217 1163
Head of Investor Relations M: +27 (83) 500 8019
E: tndlovu6@oldmutual.com
Communications:
Alleyne Smith T: +27 (0)11 217 1506
Senior Communications Manager: M: +27 (72) 733 0911
Group Marketing, Public E: ASmith11@oldmutual.com
Affairs and Sustainability
Notes to Editors
About Old Mutual
Old Mutual is a premium African financial services group that
offers a broad spectrum of financial solutions to retail and
corporate customers across key market segments in 14 countries. Old
Mutual's primary operations are in South Africa and the Rest of
Africa, and it has a niche business in China. With over 176 years
of heritage across sub-Saharan Africa, Old Mutual is a crucial part
of the communities it serves and broader society on the
continent.
For further information on Old Mutual, and its underlying
businesses, please visit the corporate website at www.oldmutual.com
.
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END
MSCUOUSRANUNUAR
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