MAURITIUS UNION ASSURANCE CO. LTD

(“MUA”)

 

NOTICE UNDER LISTING RULES 13.15

 

As previously announced, the board of MUA has reached an agreement with Capital Leasing Ltd (“CLL”)- a member of Group Mon Loisir, to dispose of its 100% subsidiary MUA Leasing Company Limited (“MUAL”). The parties executed a Share Purchase Agreement on 14 February 2006 encompassing the main conditions of the transaction.

MUA will receive a consideration of Rs 100m. The disposal constitutes a Disclosable Transaction under chapter 13 of the Listing Rules, which requires the issue of a circular to all shareholders of MUA and the publication of this summary.

1.                  Description of the Transaction

The transaction consists of the sale by MUA of all the shares of MUAL, against payment of the consideration mentioned above. The shares will be purchase by CLL, or by an ad hoc investment vehicle set up by Groupe Mon Loisir to execute the transaction.

MUAL was set up as a 100% subsidiary of MUA in 1997, to provide leasing finance to local businesses. It is an authorised deposit taking institution. The company has been profitable over the years, but in the face of increasing competition has lately found it difficult to efficiently invest funds collected.

The disposal fits in the board’s strategy to re-focus MUA on its core competencies in the insurance industry. The board believes that the shares being disposed of are worth their net book value at the date of the transaction, which is the price at which the company is being sold.

The transaction will reduce MUA’s investment in subsidiary undertakings by Rs 100M, while increasing its cash holdings by the same amount, thus rendering the company more liquid.

2.                  Presentation of MUAL

MUAL has been profitable over time, and has been able to pay a regular dividend to its corporate parent.

The audited net profit of MUAL for the two financial years ended respectively in December 2003 and 2004 are as follows:-

 

 

2004

 

2003

 

(Rs 000’s)

Profit before taxation

7,556

 

4,173

 

 

 

 

Net profit after taxation

7,918

 

3,235

3.                  Trading Prospect of MUA Group

MUA’s strategy is to reinforce its position as one of the strongest composite insurance companies on the market. Internal growth targets for 2006 have been agreed at ambitious levels, and with a very clear commitment from all stakeholders. MUA intends to maintain its leadership in automotive insurance and to develop its non-motor business. The shareholders’ funds have reached a significant level, which allows the company to also consider attractively priced acquisitions.

4.                  Legal Or Arbitration Proceedings

A claim of Rs.737M was submitted to MUA in 2003 by The Mauritius Commercial Bank Ltd (“MCB”). MUA is disputing the claim, which it considers, not covered under the insurance policy. MCB has entered an action in court against MUA on that issue.  MUA is confident that in line with common international practices the court ruling will confirm that the claim in not valid.

5.                  Conclusion

The Directors of MUA consider the terms of the disposal are fair, reasonable and in the best interests of the MUA Group taken as a whole.

 

Copies of the full circular have been posted to all shareholders registered at the close of business on 14 February 06. Further copies are available at the Registered Office of the Company up to 28 February 2006.

 

By order of the board                                                                         

 

Corporate & Secretarial Services Centre Ltd

Secretary

 

27 September 2006

This notice is issued pursuant to Listing Rule 13.15

The board of directors of MUA accepts full responsibility for the accuracy of the information contained in this notice.