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CAPITEC BANK HOLDINGS LIMITED - General Repurchase of an additional 3% non-redeemable, non-cumulative, non-participating Preference Shares

Release Date: 04/08/2015 14:08
Code(s): CPIP CPI     PDF:  
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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 which 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 from 1 January 2015, only 70% of the original
preference share capital contributed to Capitec’s capital
adequacy ratio.

In the notice of the Capitec annual general meeting held
on 29 May 2015(“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 proposed to be granted by
shareholders, 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 (“the
current general authority”).

Shareholders are hereby advised that, in addition to the
3.11%   preference   shares  previously  repurchased,  as
advised to shareholders on 24 June 2015, the Company has
repurchased 73 578 preference shares, representing 3.21%
of the issued preference share capital as at the date of
the   current   general   authority   to  repurchase  the
preference shares. The repurchase was made out of the
Company’s available cash resources. The total percentage
of preference shares repurchased to date in the 2016
financial year amounts to 6.32%. The preference shares
were repurchased for an aggregate value of R6 165 030.00.

 Date of     Number of     Highest       Lowest      Aggregate
repurchase  preference    price per     price per      value
               shares     preference   preference
            repurchased     share        shares
                  
3 July         73 578      R86.50        R82.00       R6 165 030.00
2015 to 3
August
2015

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 counterparties.

Application will be made to the JSE to de-list the
preference shares at which point they will be cancelled.

Capitec is entitled to repurchase a further 314 033
preference shares (13.68% of the preference shares in
issue as at the date of the current general 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.

As at the date of this announcement, the Company held 73
578 preference shares in treasury.

The impact of the repurchase of the preference shares on
the financial information of the Company is immaterial.
The preference shares were repurchased from excess cash
resources of the Company; going forward, no preference
share dividends will be payable on the repurchased
preference shares and interest earned on the cash
utilised for the repurchase will be foregone.

OPINION OF THE BOARD OF THE COMPANY

The board of Capitec has considered the effect of the
repurchases and is of the opinion that:

-   the Company and the Group will be able, in the
    ordinary course of business, to repay their debts for
    a period of 12 months after the date of this
    announcement;
-   the consolidated assets of the Company and the Group
    will be in excess of the consolidated liabilities of
    the Company and the Group for a period of 12 months
    after the date of this announcement;
-   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 for a period of
    12 months after the date of this announcement; and
-   the Company and the Group will have sufficient
    working capital for ordinary business purposes.

Stellenbosch
4 August 2015

Sponsor and corporate advisor
PSG Capital Proprietary Limited

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