The acquisition of Capital Alliance (CAHL) has enabled the Liberty group to progress the restructuring process faster than on a standalone basis.
The salient financial features are as follows:
* The reduction in the cost base after the successful completion of the restructuring and integration activities (planned to be complete by 2008) is estimated to be around R300 million (before tax) per annum. The capitalised effect of these savings is estimated at around R1 billion (after tax);
* Restructuring and integration costs of the group are estimated to be around R500 million (before tax) over the next three to four years;
* Approximately 70% of these costs would be incurred regardless of the CAHL acquisition as they relate to the planned restructuring of the group and the consolidation onto a single IT platform;
* The goodwill impairment (cost of control) on acquisition of CAHL amounted to R312 million as disclosed in the Liberty Group Limited interim financial statements published in August this year