AFRICAN BANK LIMITED - Update on restructuring of African Bank

Update on restructuring of African Bank

AFRICAN BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registered bank)
(Registration number 1975/002526/06)
Company code: BIABL
("African Bank" or "the Bank")



Update on restructuring of African Bank

1.   Stakeholders are referred to the statement regarding the Curatorship of African Bank ("the
     Curatorship") that was made by the then Governor of the South African Reserve Bank
     ("SARB"), Ms. Gill Marcus, on 10 August 2014 ("the SARB statement") and to the Stock
     Exchange News Service ("SENS") announcements released by African Bank Investments
     Limited and African Bank on 26 September 2014, 10 December 2014, 3 March 2015 and on 31
     March 2015 ("the Restructuring SENS Announcements").

2.   The SARB statement confirmed that Mr. Tom Winterboer was appointed as Curator of African
     Bank ("the Curator") in terms of the Banks Act No. 94 of 1990 (as amended) on 10 August
     2014. At the same time the SARB statement set out a proposal for the restructuring of African
     Bank, which entailed the creation of a new "Good Bank" ("the Good Bank Restructuring
     Proposal"). Further detail about the Good Bank Restructuring Proposal has been communicated
     to stakeholders in the Restructuring SENS Announcements.

3.   The Curator is pleased to announce that both the senior unsecured debt holder committee and
     the Tier II debt holder committee have now in principle expressed their support for the Good Bank
     Restructuring Proposal. The salient terms of the Good Bank Restructuring Proposal entail that
     senior funders (i.e. holders of unsecured senior notes, corporate bilateral deposits and facilities)
     and subordinated funders (i.e. holders of subordinated notes, unlisted subordinated debentures
     and subordinated loans) be settled as follows:
        a. 90% of the existing claims of senior funders ("Senior Claims") will be exchanged for new
           unsecured notes in Good Bank on economic terms that match the terms of the relevant
           Senior Claims, save that the maturity shall be extended by the period from the date of
           Curatorship to completion of the restructuring, plus 24 months. The remaining 10% of the
           Senior Claims will be discharged through the issue of a new stub debt instrument in African
           Bank, which will be subordinated only to claims of the SARB in terms of the loan funding to
           be provided by SARB to African Bank.
        b. the following two instruments will be issued in exchange for the subordinated funders'
           claims of approximately R4.4 billion in African Bank ("Subordinated Claims"):
                 i. new subordinated 10 year (non-callable for 5 years) Basel 3 compliant Tier II
                    instruments in Good Bank, in exchange for a R1.65 billion portion of the
                    Subordinated Claims; and
                ii. subordinated stub debt instruments in African Bank, in exchange for the remaining
                    R2.75 billion portion of the Subordinated Claims. The stub instruments will rank
                    behind SARB claims, the senior stub claims referred to in 3.a above and other
                    unsubordinated creditors of African Bank.
        c. Subordinated funders will also be afforded the opportunity to participate in the Good Bank
           group structure as equity holders as an alternative to the proposal described in clause 3.b
           above.

4.   As part of the settlement offers, senior funders and subordinated funders will be required to agree
     to have no further claims against African Bank (other than the stub claims issued to them as part
     of the Good Bank Restructuring Proposal).

The Curator will continue to make further announcements related to the Restructuring of African Bank
in due course.

On behalf of the Curator of the Bank

Midrand
28 May 2015

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Footnote : T Winterboer was appointed as Curator of African Bank Limited on 10 August 2014 by the
Minister of Finance of the Republic of South Africa and pursuant to the Banks Act No. 94 of 1990 (as
amended) to manage the affairs of African Bank Limited subject to the supervision of the Registrar of
Banks. Please note that Mr Winterboer acts in the aforesaid capacity.

Date: 28/05/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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