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General repurchase of an additional 3% non-redeemable, non-cumulative, non-participating preference shares
Capitec Bank Holdings Limited
Registration number 1999/025903/06
Registered bank controlling company
Incorporated in the Republic of South Africa
JSE ordinary share code: CPI ISIN code: ZAE000035861
JSE preference share code: CPIP ISIN code: ZAE000083838
("Capitec" or "the Company")
GENERAL REPURCHASE OF AN ADDITIONAL 3% NON-REDEEMABLE,
NON-CUMULATIVE, NON-PARTICIPATING PREFERENCE SHARES
(“PREFERENCE SHARES”)
In 2010 the Basel Committee on Banking Supervision
published its global regulatory framework for more
resilient banks and banking systems (“Basel III”). The
Regulations relating to Banks were amended to provide,
among other things, for the implementation of Basel III
in South Africa and came into effect on 1 January 2013.
Prior to the implementation of Basel III, the preference
share capital of Capitec contributed fully to the capital
adequacy ratio of the Company. As a result of the
“grandfathering” provisions provided for in Basel III,
the contribution of the preference shares to the
Company’s capital adequacy ratio reduces by 10% per
annum. As at 31 January 2014, only 80% of the original
preference share capital contributed to Capitec’s capital
adequacy ratio.
In the notice of the Capitec annual general meeting held
on 30 May 2014 (“the AGM”), shareholders were advised
that the board of the Company may resolve to repurchase
preference shares due to the preference shares’ declining
contribution to the Company’s capital adequacy ratio.
Shareholders were further advised that any repurchases
under the general authority would be at market value in
accordance with the provisions set out under the relevant
special resolution. At the AGM, shareholders granted a
general authority to the board of Capitec to repurchase
up to 20% of the issued preference share capital of
Capitec.
Prior to the latest repurchase, the Company has
repurchased 355 649 of its preference shares,
representing 12.4% of its issued preference share
capital.
Shareholders are hereby advised that Capitec has
repurchased an additional 86 070 preference shares,
representing 3.0% and bringing the cumulative number of
preference shares repurchased, at 14 August 2014, to
441 719 (comprising 15.4% of its issued preference share
capital as at the date of the authority to repurchase the
preference shares), out of the Company’s available cash
resources. The preference shares were repurchased for an
aggregate value of R7 746 150.00.
Date of Number of Highest Lowest Aggregate
repurchase preference price per price per value
shares preference preference
repurchase share shares
d
13 & 14 86 070 R90.00 R89.99 R7 746 150.00
August
2014
The repurchases were made in terms of the general
authority granted by shareholders at the AGM, and were
effected through the order book operated by the JSE
trading system without any prior understanding or
arrangement between the Company and the counter parties.
The preference shares repurchased will be de-listed and
cancelled upon registration of the preference shares in
the name of Capitec.
Capitec is entitled to repurchase a further 132 084
preference shares (4.6% of the preference shares in issue
as at the date of the authority), in terms of the current
general authority, which is valid until Capitec’s next
annual general meeting, subject to the requirements of
the Banks Act.
OPINION OF THE BOARD OF THE COMPANY
The board of Capitec has considered the effect of the
repurchases and is of the opinion that, for a period of
12 months following the date of this announcement:
- the Company and the Group will be able to repay their
debts, in the ordinary course of business;
- the consolidated assets of the Company and the Group
will be in excess of the consolidated liabilities of
the Company and the Group;
- the Company’s and the Group’s share capital and
reserves will be adequate for the purposes of the
business of the Company and the Group; and
- the Company and the Group will have sufficient
working capital for ordinary business purposes.
PRO FORMA FINANCIAL EFFECTS OF THE REPURCHASES
The unaudited pro-forma financial effects, as set out
below, have been prepared to assist Capitec shareholders
in assessing the impact of the repurchases on earnings
per share, headline earnings per share, net asset value
per share and net tangible asset value per share of
Capitec as at and for the twelve months ended
28 February 2014.
These unaudited pro forma financial effects have been
prepared for illustrative purposes only and because of
their nature, may not fairly present Capitec’s financial
position after the repurchases. The directors of Capitec
are responsible for the preparation of the financial
effects and they have not been reviewed by Capitec’s
auditors.
Before the After the % change
repurchases repurchases
(cents) (cents)
Earnings per share 1 752 1 753 0.06
Headline earnings 1 752 1 753 0.06
per share
Diluted earnings 1 740 1 741 0.06
per share
Diluted headline 1 740 1 741 0.06
earnings per share
Net asset value 8 433 8 435 0.02
per share
Tangible net asset 8 259 8 261 0.02
value per share
NOTES AND ASSUMPTIONS
- The figures set out in the “Before the repurchases”
column have been extracted from the audited results
for the twelve months ended 28 February 2014.
- The repurchases are assumed to have been implemented
on 1 March 2013 for earnings and headline earnings
per share purposes and on 28 February 2014 for net
asset and tangible net asset value per share
purposes.
- The aggregate repurchases to date consist of the
repurchase of 441 719 preference shares at an
average price of R87.88751 per preference share for
an aggregate value of R38.8 million.
- It is assumed that the repurchases were funded out
of the available cash resources of the Group being
Capitec and its subsidiaries, which was earning
interest at a before tax interest rate of 5.22% per
annum.
- As at the date of this announcement, the Company
held 17 062 preference shares in treasury. The
Company is in the process of applying to the JSE
Limited to delist these preference shares.
- All adjustments set out above are expected to have a
continuing effect.
Stellenbosch
14 August 2014
Sponsor and corporate advisor
PSG Capital (Pty) Limited
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