Liberty restructures for growth

05 September 2008 Liberty Group

Liberty Group, Liberty Holdings and Standard Bank have jointly announced details of a proposed shareholding re-structure of the Liberty group.

As intimated at Liberty’s interim results presentation on 06 August, the aim is to optimise the group’s structure as it implements its plans to grow into areas of financial services beyond its traditional long-term insurance interests.

Subject to the necessary shareholder and regulatory approvals, the proposed scheme of arrangement would see Liberty Holdings acquiring all the Liberty Group shares that it does not already own, in exchange for an issue of ordinary shares in Liberty Holdings.

Liberty Group Chief Executive Bruce Hemphill (pictured) explains: “Our growth plans will require us to re-structure our business at the group operating company level, where currently the listed company is a life company. The flexibility necessary to deliver on our growth strategy is better achieved through a listed holding company for a family of operating companies, instead of a listed life company as the holding structure.”

Upon successful conclusion of the exercise, Liberty Holdings will be the sole entry point to the group on the JSE, simplifying the existing situation for equity investors.

Hemphill said that since the object of the scheme is a group re-structuring rather than a take-out of minority shareholdings, it is intended that the scheme should in essence be economically neutral to shareholders in both Liberty Group and Liberty Holdings.

The financial effects of the scheme for shareholders of Liberty Group, Liberty Holdings and Standard Bank will most likely be insignificant.

Hemphill also emphasised that the proposed scheme will have no impact at all on Liberty’s current daily operations; nor will it negatively impact Liberty policyholders and bondholders, financial advisers or staff.

In terms of the proposed scheme, and subject to shareholder approval, Liberty Holdings’ share capital will be subdivided and increased, in order to achieve the required economic neutrality for all shareholders.

The scheme envisages that all necessary shareholder and regulatory approvals should be obtained by 31 December 2008 at the latest. Further announcements regarding the proposal will be made in due course.

The Liberty Holdings cautionary announcement dated 21 July 2008 has been withdrawn.

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