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Declaration announcement in respect of ABIL's renouncable rights offer and cautionary announcement
AFRICAN BANK INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/021193/06)
(Ordinary share code: ABL) (ISIN: ZAE000030060)
(Preference share code: ABLP) (ISIN: ZAE000065215)
(“ABIL” or “the Company” or “the Group”)
DECLARATION ANNOUNCEMENT IN RESPECT OF ABIL'S RENOUNCEABLE RIGHTS OFFER AND
CAUTIONARY ANNOUNCEMENT
Not for publication, distribution or release, directly or indirectly, in or into the United States of
America, Canada, Japan, Australia or Hong Kong.
1. Introduction
Shareholders are referred to the announcement on the Stock Exchange News Service (“SENS”) on
5 August 2013 wherein the Company announced its intention to raise new equity capital through a
fully underwritten renounceable rights offer and to the trading update released on SENS earlier this
morning, 25 October 2013 wherein, the Company, inter alia, confirmed its intention to raise new
equity capital in the increased sum of R5.5 billion through a fully underwritten renounceable rights
offer ("Rights Offer").
2. Underwriting and terms of Rights Offer
On 5 August 2013 ABIL shareholders were advised that ABIL has entered into a Standby
Underwriting Agreement with Goldman Sachs International for up to R4 billion, subject to standard
terms and conditions. The Standby Underwriting Agreement has been amended to increase the
underwriting commitment to R5.5 billion, which remains subject to standard terms and conditions.
The price at which the Rights Offer Shares will be offered to ABIL shareholders will be announced
in the Finalisation Announcement to be published on SENS on Friday, 1 November 2013. Excess
applications for Rights Offer Shares will be allowed. Pricing of the rights offer shares is intended to
be determined during the course of next week and will be announced on Friday, 1 November 2013.
3. Rationale for the Rights Offer
The Company’s board of directors and executive management are of the opinion that ABIL’s capital
base needs to be strengthened in anticipation of the new Basel III phased capital requirements and
to provide additional confidence to funders. The board of directors further believes it is appropriate
to increase the buffer available by raising capital through the Rights Offer to absorb credit losses at
the levels currently being experienced, and to proactively strengthen the capital base, all of which
will provide ABIL with the financial flexibility it needs to support its business’ growth prospects.
In particular, the Company is seeking to achieve the following objectives through the Rights Offer:
- supplement the existing capital base with high quality capital;
- provide additional capital protection against any deterioration of the South African
economy;
- support loan book growth; and
- provide a fair and transparent market solution to raise capital.
4. Salient dates and times
Subject to the fulfilment of the conditions precedent as set out in paragraph 6 below, the proposed
salient dates and times for the Rights Offer are set out below.
2013
Declaration Announcement and Declaration Date Friday, 25 October 2013
Finalisation Announcement and Finalisation Date Friday, 1 November 2013
Last day to trade in ABIL shares in order to settle trades by the record Friday, 8 November
date and to qualify to participate in the Rights Offer (cum allocation
rights)
ABIL shares commence trading ex-entitlement on the JSE at 09:00 a.m. Monday, 11 November
on
Listing of and trading in the letters of allocation on the JSE commences Monday, 11 November
at 09:00 a.m. on
Record date for the Rights Offer, for the purposes of determining ABIL Friday, 15 November
shareholders entitled to participate in the Rights Offer, at 17:00 p.m. on
Circular and, where applicable, form of instruction posted to qualifying Monday, 18 November
shareholders on
Rights Offer opens at 09:00 a.m. on Monday, 18 November
In respect of qualifying certificated shareholders, letters of allocation Monday, 18 November
credited to an electronic account held with the Transfer Secretaries at
09:00 a.m. on
In respect of qualifying dematerialised shareholders, CSDP or broker Monday, 18 November
accounts credited with letters of allocation at 09:00 a.m. on
Last day to trade letters of allocation on the JSE in order to settle trades Friday, 29 November
by the closing date for the Rights Offer and participate in the Rights
Offer at 12:00 p.m. on
In respect of qualifying certificated shareholders wishing to sell all or Friday, 29 November
some of their letters of allocation, forms of instruction to be lodged with
the Transfer Secretaries by 12:00 p.m. on
Listing of Rights Offer Shares and trading therein on the JSE Monday, 2 December
commences at 09:00 a.m. on
In respect of qualifying certificated shareholders (or their renouncees) Friday, 6 December
wishing to exercise all or some of their rights, payment to be made and
forms of instruction to be lodged with the Transfer Secretaries by 12:00
p.m. on
Rights Offer closes at 12:00 p.m. on Friday, 6 December
Record date for the letters of allocation on Friday, 6 December
Rights Offer Shares issued on Monday, 9 December
In respect of qualifying dematerialised shareholders (or their Monday, 9 December
renouncees), CSDP or broker accounts debited with the aggregate
subscription price and updated with Rights Offer Shares at 09:00 a.m.
on
In respect of qualifying certificated shareholders (or their renouncees), Monday, 9 December
share certificates in respect of Rights Offer Shares posted on or about
Results of the Rights Offer announced on SENS on Monday, 9 December
Placement of the rump shares by Goldman Sachs International Monday, 9 December
Results of the Rights Offer published in the press on Tuesday, 10 December
Refund payments made and/or share certificates posted to qualifying Wednesday, 11 December
certificated shareholders and/or CSDP or broker accounts credited in
respect of excess applications (if applicable) on or about
Settlement of the rump shares and CSDP/broker securities accounts of Thursday, 12 December
Goldman Sachs International or its nominee(s) credited with the rump
shares
Notes:
1. Share certificates in respect of ABIL shares may not be dematerialised or rematerialised between Monday,
11 November 2013 and Friday, 15 November 2013, both days inclusive.
2. If you are a qualifying dematerialised shareholder you are required to notify your duly appointed CSDP or broker
of your acceptance of the Rights Offer in the manner and time stipulated in the agreement governing the
relationship between yourself and your CSDP or broker.
3. CSDPs effect payment on a delivery versus payment method in respect of qualifying dematerialised
shareholders.
4. All times listed above are location times in South Africa.
5. Share certificates will be posted at the risk of the qualifying certificated shareholders (or their renouncees).
6. Refund payments will be made or transferred at the risk of the qualifying certificated shareholders (or their
renouncees).
7. Any changes to the dates and times will be announced on SENS and in the press.
5. Conditions precedent
The implementation of the Rights Offer is subject to the conclusion of a final underwriting
agreement (“Final Underwriting Agreement”) which will contain the following conditions precedent,
to the extent that they have not been fulfilled by the time of signing of the Final Underwriting
Agreement:
(a) the JSE approving the Rights Offer circular and the Form of Instruction and/or Letters of
Allocation to be despatched to ABIL shareholders;
(b) a copy of the Final Underwriting Agreement together with the prescribed fee and supporting
sworn declarations from directors of Goldman Sachs International referred to in section 100
of the Companies Act, being filed with the Companies and Intellectual Property Commission
in Pretoria, RSA;
(c) the delivery to Goldman Sachs International of the customary documents required to be
delivered under terms of the Final Underwriting Agreement prior to the Finalisation Date;
(d) the Company providing Goldman Sachs International and its advisers, on a confidential
basis, with all the information requested by them, which Goldman Sachs International (acting
reasonably and in good faith) considers appropriate for the purposes of evaluating the
historical and prospective (business and financial) condition of the Group, Goldman Sachs
International's due diligence investigation in connection with the Rights Offer as well as
evaluating the feasibility of the Rights Offer;
(e) Goldman Sachs International having received a notification from the Financial Services
Board, which is either unconditional or contains only those conditions which Goldman Sachs
International considers to be satisfactory (acting in good faith), indicating that it does not
object to the acquisition by Goldman Sachs International of more than 25% in the event that
Goldman Sachs International is required to subscribe for New Ordinary Shares under the
Final Underwriting Agreement and the number of New Ordinary Shares which it may be
required to subscribe for, when aggregated with any existing shares it holds in the Company,
exceeds 25%; and
(f) none of the termination events described in the Final Underwriting Agreement having
occurred prior to 16h30 on the date prior to the Finalisation Date.
6. Cautionary announcement and further notices
The Finalisation Announcement in respect of the Rights Offer will be released on SENS on Friday,
1 November 2013 and published in the South African press on Monday, 4 November 2013 which
announcement will include details on the pricing of the Rights Offer and the pro forma financial
effects of the Rights Offer.
Shareholders are therefore advised to exercise caution when trading in their ABIL securities until
the financial effects of the Rights Offer have been published.
Midrand
25 October 2013
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Sole Global Co-ordinator, Sole Bookrunner and Sole Underwriter
GOLDMAN SACHS INTERNATIONAL
Independent reporting accountants and auditors
DELOITTE & TOUCHE
Legal advisers to the Company as to U.S. and English law
REED SMITH LLP
South African legal advisers to the Company
PRINSLOO, TINDLE & ANDROPOULOS INC.
Legal advisers to the Sole Global Co-ordinator, Sole Bookrunner and Sole Underwriter as to U.S. and
English law
NORTON ROSE FULBRIGHT LLP
South African legal advisers to the Sole Global Co-ordinator, Sole Bookrunner and Sole Underwriter
NORTON ROSE FULBRIGHT SOUTH AFRICA (incorporated as Deneys Reitz Inc.)
Important Information:
This has been prepared and issued by, and is the sole responsibility of, ABIL. This announcement does
not constitute, or form part of an offer to sell, or the solicitation of an offer to subscribe for or buy, any
Rights Offer Shares or letters of allocation.
This announcement is not a prospectus, disclosure document or offering document under the laws of
South Africa or any other law and does not purport to be complete. Investors should not subscribe for or
purchase any securities referred to in this announcement except solely on the basis of the information in
the Rights Offer circular to be published by ABIL in due course in connection with the Rights Offer.
Any decision to participate in the Rights Offer or to purchase, otherwise acquire, subscribe for, or sell or
otherwise dispose of any securities should only be made on the basis of the information contained in the
Rights Offer circular when it is published in due course, which will contain further information relating to
ABIL as well as a summary of the risk factors to which any investment is subject. The information
contained in this announcement is for background purposes only and does not purport to be full or
complete. No reliance may or should be placed by any person for any purpose whatsoever on the
information contained in this announcement or on its accuracy or completeness. The information in this
announcement is subject to change.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any
solicitation of any offer to acquire, the Rights Offer Shares or letters of allocation offered by any person in
the United States, Australia, Canada, Japan and Hong Kong, subject to certain exceptions, and any other
jurisdiction in which such offer or solicitation is unlawful. No public offer of Rights Offer Shares or letters of
allocation will be made in the United States, Australia, Canada, Japan and Hong Kong, and any other
jurisdiction where the extension or making of the Rights Offer would be unlawful or in contravention of
certain regulations. The Rights Offer Shares and letters of allocation have not been and will not be
registered under the securities laws of such jurisdictions and may not be offered, sold, taken up,
exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions
except pursuant to an exemption from and in compliance with any applicable securities laws.
This announcement is not for distribution, directly or indirectly, in or into the United States, Australia,
Canada, Japan and Hong Kong, subject to certain exceptions, and any other jurisdiction where the
extension or making of the Rights Offer would be unlawful or in contravention of certain regulations. The
distribution of this announcement and/or the Rights Offer circular and/or the letters of allocation and/or the
Rights Offer Shares into jurisdictions other than the Republic of South Africa may be restricted by law.
Persons into whose possession such announcement comes should inform themselves about and observe
any such restrictions. Any failure to comply with these restrictions may constitute a violation of the
securities laws of such jurisdiction.
The information contained in this announcement has been prepared solely for information purposes and it
does not constitute, or form part of, any offer or invitation to purchase, underwrite or otherwise acquire
rights, shares or depository receipts in ABIL or its affiliates, or the solicitation of any such offer. The
securities referred to herein have not been, and will not be registered under the U.S. Securities Act of
1933, as amended (the “Securities Act”), or the laws of any state or jurisdiction of the United States, and
may not be offered or sold in the United States except pursuant to an exemption from, or in transactions
not subject to, the registration requirements of the Securities Act and applicable state laws. The
information contained in this announcement does not constitute an offer of securities for sale in the United
States nor the solicitation of an offer to buy any such securities. ABIL does not intend to conduct a public
offering of securities in the United States.
In addition, in the United Kingdom, this announcement is solely directed at: (i) investment professionals
falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended (the “Order”); or who are “qualified investors”, within the meaning of Article 2(1)(e) of
the Directive 2003/71/EC and amendments thereto, including Directive 2010/73/EU, to the extent
implemented in the relevant Member State of the European Economic Area (“Qualified Investors”), who
fall within Article 49(2)(a) to (d) of the Order, and (ii) persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as “relevant persons”). The information in this
announcement must not be acted on or relied on (i) in the United Kingdom, by persons who are not
relevant persons, and (ii) in any member state of the European Economic Area other than the United
Kingdom, by persons who are not Qualified Investors or persons to whom it may otherwise lawfully be
communicated. Any investment or investment activity to which the information in this announcement
relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any member state of the
European Economic Area other than the United Kingdom, Qualified Investors or persons to whom it may
otherwise lawfully be communicated, and will be engaged in only with such persons.
Certain statements in this announcement constitute “forward-looking statements”. All statements other
than statements of historical facts included in this announcement, including, without limitation, those
regarding the financial position, revenue and profitability (including, without limitation, any financial or
operating projections or predictions), business strategy, prospects, plans and objectives of management
for future operations of ABIL, and macro-economic conditions in South Africa and elsewhere, are forward-
looking statements. Some of these statements can be identified by forward-looking terms, such as
“anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “plan”, “will” and “would” (or
in each case, their negative) and similar words, as well as statements in the future tense. However, these
words are not the exclusive means of identifying forward-looking statements. These forward-looking
statements and any other predictions contained in this announcement involve known as well as unknown
risks, uncertainties and other factors which may cause actual results or performance of ABIL, industry
results, or macro-economic conditions, to differ materially from those expressed or implied by such
forward-looking statements. Such forward-looking statements are based on current beliefs, assumptions,
expectations, estimates and projections of the directors and management of the Company, public
statements by ABIL, present and future business strategies and the environment in which ABIL will
operate in the future. These forward-looking statements are not guarantees of ABIL’s future performance
and are subject to assumptions, risks and uncertainties that could cause actual future results to differ
materially from those expressed in or implied by such forward-looking statements. Many of these
assumptions, risks and uncertainties relate to factors that are beyond ABIL's ability to control or estimate
precisely, and could cause ABIL’s actual performance, results or achievements to be materially different
from any future performance, results or achievements that may be expressed or implied by such forward-
looking statements. These factors include changes in general economic and business conditions in the
sector in South Africa; changes and volatility in currency exchange rates, interest rates, share price and
credit spreads; changes in the price of ABIL shares; changes in the availability and conditionality of
funding; the adequacy of ABIL’s provision for impairment as well as future net impairment charges;
changes in governmental policy and regulation; changes in ABIL’s competitive environment; and factors
that are not known to the company at this time.
These forward-looking statements speak only as at the date of this announcement. Except as required by
the JSE and applicable law, ABIL does not have any obligation to update or revise publicly any forward-
looking statement, whether as a result of new information, further events or otherwise. Except as required
by the JSE and applicable law, ABIL expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statement contained herein to reflect any change in ABIL's
expectations with regard thereto or any change in events, conditions or circumstances on which any such
statement is based. In light of these risks, uncertainties and assumptions, the forward-looking events
discussed herein might not occur. Goldman Sachs International expressly disclaim any obligation or
undertaking to update, review or revise any forward-looking statement contained in this announcement
whether as a result of new information, future developments or otherwise.
Date: 25/10/2013 12:55:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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