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NEDBANK GROUP LIMITED - Nedbank Group to Acquire 20% of Ecobank Transnational Incorporated (Eti Or Ecobank)

Release Date: 02/10/2014 14:24
Code(s): NED     PDF:  
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Nedbank Group to Acquire 20% of Ecobank Transnational Incorporated (‘Eti’ Or ‘Ecobank’)

NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
('Nedbank Group' or 'the group')


NEDBANK GROUP TO ACQUIRE 20% OF ECOBANK TRANSNATIONAL INCORPORATED (‘ETI’
Or ‘ECOBANK’) THROUGH THE ISSUE OF NEW ORDINARY SHARES BY ETI


Introduction
ETI and Nedbank Group established its strategic banking alliance in 2008 providing a unique one-
bank experience to their clients across the largest banking network in Africa, comprising more than
2,000 branches in 39 countries. In 2011, Nedbank Limited, a member of the Nedbank Group,
provided ETI a USD285 million facility in support of Ecobank’s corporate development programmes,
including its acquisition of Oceanic Bank in Nigeria. The arrangement, announced on 1 December
2011, provided Nedbank Group with subscription rights which it could elect to exercise between 24
and 36 months to become a 20% shareholder in ETI.


Nedbank Group has exercised its rights to subscribe for a 20% shareholding in ETI. As a shareholder,
the Nedbank Group will be afforded the right to representation on the ETI board. The Nedbank Group
has nominated its Chief Operating Officer, Graham Dempster, to join the ETI board and ETI will
exercise its reciprocal right to an appointment on the Nedbank Group board. Both board appointments
are subject to regulatory approvals.


The Ecobank investment
Nedbank Group will subscribe for 4 512 618 890 new ETI shares to be issued for a cash
consideration of USD493,4 million. The investment in ETI will be at an effective price of USD10,93
cents per share. The market price of ETI shares on the Nigerian Stock Exchange at 30 September
2014 was USD11,43 cents per share and the book value per ETI share as disclosed by ETI at 30
June 2014 was USD12,23 cents per share.


Impact on Nedbank Group capital adequacy ratios
This transaction is expected to result in an approximate 80 basis points pro forma reduction in
Nedbank Group’s common equity tier 1 ratio under Basel 3, which was 12,1% at 30 June 2014. Post
the transaction, Nedbank Group will remain strongly capitalised and its common equity tier 1 ratio will
be well within the group’s published internal target range of 10,5% to 12,5%.


Financial information on ETI
ETI reported attributable shareholders’ equity of USD2,1 billion at 30 June 2014 and profit attributable
to the owners of the company of USD164 million for the six months ended 30 June 2014. ETI reported
a return on average equity of 17,7% in the first six months of 2014.


JSE categorisation
The subscription consideration is below the category 2 threshold in terms of the JSE Listings
Requirements. This announcement is made for information purposes only.


Regulatory approvals
All necessary regulatory approvals have been received and the transaction is unconditional.


Sandton
2 October 2014


Investment bank, corporate adviser and joint sponsor to Nedbank:
Nedbank Capital, a division of Nedbank Limited


Investment bank and financial adviser to Nedbank:
JPMorgan Chase Bank, N.A. (Johannesburg branch)


Joint sponsor to Nedbank:
Merrill Lynch South Africa Proprietary Limited


Sponsor to Nedbank in Namibia:
Old Mutual Investment Services (Namibia) (Proprietary) Limited

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