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Publication of Information Memorandum for the Good Bank Restructuring Proposal and Acquisition of STANGEN
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”)
Publication of Information Memorandum for the Good Bank Restructuring Proposal and
Acquisition of the Standard and General Insurance Company Limited
Stakeholders are referred to the statement regarding the Curatorship of African Bank ("the
Curatorship") 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 ("ABIL") and African Bank on
26 September 2014, 10 December 2014, 3 and 31 March 2015, and by African Bank on 28 and 29
May 2015, 11 June 2015 and 15 July 2015 (“the Restructuring SENS Announcements”).
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 SARB Restructuring Proposal", previously also
referred to as "the Good Bank Restructuring Proposal"). Further detail about the SARB Restructuring
Proposal has been communicated to stakeholders in the Restructuring SENS Announcements.
The Curator is pleased to announce the release of the Information Memorandum, a significant
milestone in this process, which sets out more detail relating to the SARB Restructuring Proposal.
Content and Purpose of the Information Memorandum
The Curator of African Bank Limited is proposing the transaction explained in the Information
Memorandum for the resolution and restructuring of African Bank Limited (the "Proposed
Transaction").
Given that components of the Proposed Transaction may amount to the exercise of public power
and / or administrative action as defined in the Promotion of Administrative Justice Act 3 of 2000 (as
amended) (“the Act”), the Curator believes that the release of this Information Memorandum to
interested parties for consideration and comment, as envisaged in the Act, is appropriate.
The Information Memorandum contains:
(i) an overview of the development of the SARB Restructuring Proposal into the Proposed
Transaction and the alternative resolution strategies that have been considered and rejected
by the Curator under the supervision of the Registrar of Banks during this process;
(ii) details of the Proposed Transaction, including details of the Exchange Offers; and
(iii) the overall rationale for the Curator supporting the Proposed Transaction.
The Information Memorandum also contains some historical financial information in respect of
African Bank and the Standard and General Insurance Company Limited (“Stangen”), and some
provisional prospective financial information in respect of African Bank and the New HoldCo Group
(including Good Bank and Stangen which materially comprise the business of this group).
The purpose of this Information Memorandum is to provide stakeholders and other interested
parties with detailed information about the Bank and the Proposed Transaction and to afford them
the opportunity to make written submissions in respect of the Proposed Transaction and the
resolution of the Bank.
While the Curator continues to be guided by the SARB Restructuring Proposal in developing the
Proposed Transaction, no final decision will be made in respect of the best way to restructure
African Bank until the Curator has reviewed and considered all written representations timeously
provided in response to this Information Memorandum, has made recommendations in respect
thereof to the Registrar and sought his direction. Any variation to the Proposed Transaction
following consideration of written representations will be subject to the direction and supervision of
the Registrar.
Anticipated Timetable for the Proposed Transaction
Interested parties have until 17:00 Central African Time on 9 October 2015 to provide written
comment on the Information Memorandum electronically at curatorfunders@africanbank.co.za.
Further anticipated key dates for the finalization of proposed transactions subject to receiving the
required stakeholder and regulatory approvals are the following:
26 October 2015 – Issuance of Offer Information Memorandum
26 October 2015 – Submission of Curator Report to the Minister of Finance
18 - 20th November 2015 – Creditor Vote process
24 November 2015 – Update report by Curator to Minister of Finance
08 December 2015 – Consent from Minister of Finance
01 February 2016 – Expected launch of Good Bank
The launch of Good Bank on 1 February 2016, almost two months after the anticipated approval of
the Proposed Transaction from the Minister of Finance on 8 December 2015, is driven by industry
and African Bank technology and operational considerations which preclude the execution of the
transfer of the assets and liabilities during the South African holiday period.
Access to the Information Memorandum on African Bank’s website
The Information Memorandum is a series of public documents which are available for download at
https://www.africanbank.co.za/about-us/investors.
Acquisition of Stangen
As at the date of this announcement, an agreement has been concluded pursuant to which African
Bank Investments Limited (in business rescue)("ABIL") will sell and transfer its 100% shareholding in
Stangen to African Bank on 1 October 2015, subject to fulfilment of suspensive conditions, and
obtaining the appropriate regulatory approvals. The purchase consideration for Stangen is expected
to be ZAR1.378 billion. The consideration may increase by up to ZAR 50 million dependent on the
actual level of net assets at the transfer date.
If the Proposed Transaction as set out in the Information Memorandum published today proceeds,
African Bank will sell Stangen to the insurance holding company of the New HoldCo Group being
established to take over the core business of African Bank for the same consideration as agreed
between African Bank and ABIL, so that the risk and reward of the ownership of Stangen passes to
the new Good Bank group with effect from the date of acquisition by African Bank. If the Proposed
Transaction does not proceed, and African Bank is run-off in Curatorship, the Curator believes that
African Bank should recover the consideration paid to ABIL for Stangen through such managed run-
off.
Funding Creditor roadshows
The Curator and selected Executive Committee members of Good Bank will be conducting a series of
South African and international roadshows in London and Switzerland during the period from 21
September to 1 October 2015 meeting with senior and subordinated creditors in order to discuss the
Information Memorandum. Any senior and subordinated creditors who have not been contacted
and would like to meet with the team are requested to contact the Curator electronically at
curatorfunders@africanbank.co.za
On behalf of the Curator of African Bank.
Midrand
09 September 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: 09/09/2015 07:45:00 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.
