Alexander Forbes Group Holdings Limited · JSE:AFH
Alexander Forbes — Investor Presentation (July 2004)
13 slides from Alexander Forbes's investor presentation, Jul 20, 2004
Slide 1: Alexander Forbes (AFB) Investor presentation
Alexander Forbes (“AFB”) Investor presentation 20 July 2004 Financial Advisor
Slide 2: Overview
Overview • Existing terms of the Bonds • Salient terms of the deal • Rationale • Financial effects • Conditions • Conclusions • Questions
Slide 3: Existing Terms of the Bonds
Existing Terms of the Bonds • Repayment of £118 million due on 15 Sept 2005 • Interest payments of £3 million bi-annually – 15 Mar & 15 Sept • Implied YTM at date of issue was 8.934% (NACS) • VenFin has right to exchange into 53.7 million AFB shares – at any time irrespective of share price • VenFin
Slide 4: Salient Terms of the Deal
Salient Terms of the Deal • AFB issues 114.8m new shares to VenFin for R1.159bn – Shares will not receive 67c dividend payable on 10 August – R10.10 per share represents a premium of 9.8% over 30 day VWAP prior to cautionary adjusted for dividend (i.e. R9,20) – Equates to 24.96% of enlarged share ca
Slide 5: Other Rights and Obligations
Other Rights and Obligations • VenFin has right to appoint 1 director so long as hold > 10% • VenFin cannot sell shares for 1 year • Other rights and conditions under Bonds eliminated
Slide 6: Valuation of Equity
Valuation of Equity Aggregate subscription price Rm 1159.5 Number of AFB shares m 114.8 Issue price per AFB share R 10.10 Volume weighted average price (VWAP) 30 days to 5 July 2004 9.87 Dividend due 10 August 2004 0.67 Theoretical ex-dividend share price 9.20 Implied premium to ex-dividend 30 day V
Slide 7: Valuation of Bonds
Valuation of Bonds • Negotiated settlement – No right to early redemption and thus no pre-determined value under existing bond terms • Consideration paid of R1.159bn plus £12.5m equates to: – Accrued PV of Bonds of £115.1m – Exchange rate of R11.30 / £1 (1 month forward rate) • No value paid for sub
Slide 8: Rationale
Rationale • Refinancing of international business has been a priority • Represents unique opportunity to strengthen international and group balance sheet to support growth – Greater operational and financial flexibility – Can pursue appropriate international acquisitions • Removal of risk regarding
Slide 9: Rationale (continued)
Rationale (continued) • Earnings dilution mitigated by paying £12.5m of buy back consideration from UK cash resources • Introduces supportive shareholder – VenFin preferred equity to cash alternative • Focus now solely on developing the business
Slide 10: Pro Forma Historical Financial Effects
Pro Forma Historical Financial Effects Audited Pro forma % Before the After the change Transactions Transactions (cents) (cents) Earnings per share: - Headline 151 132 -13% 102 95 -7% - Attributable Diluted earnings per share: - Headline 148 131 -12% 100 94 -6% - Attributable Net asset value (NAV):
Slide 11: Conditions
Conditions • Approval of 75% of AFB’s shareholders – Circular to be posted mid August – Shareholders’ meeting early September • Competition and other regulatory approvals to extent required • SARB has approved the transactions • VenFin shareholder approval not required
Slide 12: Conclusions
Conclusions • Key milestone for the group • Significant balance sheet capacity to explore value creating opportunities • Risk eliminated and uncertainty resolved for Alexander Forbes’ and shareholders • Introduction of a supportive shareholder • Deal executed on fair terms
Slide 13: Questions
Questions Alexander Forbes