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Relaxation of certain restrictions on Standard Bank’s black share ownership initiative
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
JSE share code: SBK
NSX share code: SNB
ISIN: ZAE000109815
("Standard Bank" or “the group”)
Relaxation of certain restrictions on Standard Bank’s black share
ownership initiative
Given the strategic importance to Standard Bank of its black share
ownership initiative, shareholders are hereby advised that the
board of directors of Standard Bank has approved the conditions
under which refinancing to facilitate the redemption of the
preference share debt funding provided by Standard Bank to the
scheme participants may be undertaken.
The black share ownership initiative, implemented in October 2004,
has been significantly successful to date with value created for
black shareholders in the structure in excess of R5.4 billion and
cash distributions that have flowed to participants exceeding
R1.6 billion.
Standard Bank facilitated the acquisition of Standard Bank
ordinary shares by the participants by subscribing for fixed rate
redeemable preference shares with a 20-year term (subsequently
reduced to 15 years in late 2009). The preference shares were
issued at a fixed rate of 8.5% nominal annual compounded semi-
annually. Since the implementation of the Tutuwa transaction in
2004, interest rates in South Africa have fallen to historic lows.
A number of participants have approached Standard Bank with a view
to refinancing their preference share debt obligations through
structures that would entail partially hedging their exposure to
the Standard Bank Group share price, thus taking advantage of the
prevailing low levels of interest rates.
With approximately two years remaining until the expiry of the
initial lock-in period of the scheme on 31 December 2014, Standard
Bank has given approval for scheme participants with vested rights
to enter into refinancing and/or hedging transactions subject to,
inter alia, the following conditions:
- The proceeds of any refinancing must first be applied to
redeeming the preference shares held by Standard Bank in the
respective structure/s;
- A maximum of 49% of the respective Standard Bank shares held
by beneficiaries may be hedged to give share price
protection to facilitate a refinance transaction;
- The black ownership levels of the group may not be diluted
as a consequence of any transaction, prior to the existing
lock-in date of 31 December 2014;
- Beneficiaries are to retain their voting rights; and
- Any such transactions may only be entered into subsequent to
the release of the annual results of Standard Bank for 2012
(scheduled to be on 7 March 2013).
Should participants choose to enter into such approved
arrangements, any redemption of the preference share funding will
improve the group’s Tier 1 capital adequacy due to the fact that
this funding is treated, under International Financial Reporting
Standards (“IFRS”), as an impairment against the group’s Tier 1
capital. There will also be a corresponding increase in the
number of the group’s reported IFRS shares in issue, as held by
the structure/s. The number of shares in issue for the purposes
of reporting the group’s normalised results will be unaffected.
Johannesburg
13 December 2012
Investment Bank and Sponsor
Standard Bank
Independent sponsor
Deutsche Securities (SA) (Pty) Ltd
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