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Curatorship update: Release of Supplementary Memorandum and the audited AFS 30 September 2015
AFRICAN BANK LIMITED (in Curatorship)
(Incorporated in the Republic of South Africa)
(Registered bank)
(Registration number 1975/002526/06)
Company code: BIABL
(“African Bank” or “the Bank”)
African Bank Limited Curatorship update: Release of a Supplementary Memorandum
and of the audited annual financial statements for the year ended 30 September 2015
The Curator is pleased to give an update regarding the Curatorship of African Bank.
Stakeholders are referred to https://www.africanbank.co.za/about-us/investors to access the
published information.
The update includes:
1. a supplementary memorandum (“Supplementary Memorandum”), being the first
supplement to the Information Memorandum published on 9 September 2015
(“Information Memorandum”);
2. the publication of audited annual financial statements of the Bank for the year ended 30
September 2015; and
3. a presentation, outlining salient aspects of the Supplementary Memorandum and
financial results for the year ended 30 September 2015, delivered by the Curator to the
financial media at 10:00 CAT on 8 December 2015.
1. Content and Purpose of the Supplementary Memorandum
The Supplementary Memorandum details certain developments which have occurred
since the release of the Information Memorandum that the Curator believes should be
brought to the attention of interested parties.
Given that components of the Proposed Transaction may amount to the exercise of
public power and / or an 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 Supplementary Memorandum to interested parties for consideration
and comment, as envisaged in the Act, is appropriate.
The Supplementary Memorandum contains:
(i) the impact of the lapse of the Stangen acquisition against the creation of a cell
captive insurance service for Bank customers;
(ii) details of the modification of the offer to senior and subordinated creditors to
include a partial cash offer;
(iii) an update to the financial forecast for Good Bank;
(iv) details of changes to the SARB Guarantee / Indemnity arrangements; and
(v) details of the changes to the expected timetable culminating in an expected
launch of Good Bank on 4 April 2016.
Anticipated Timetable for the Proposed Transaction
Interested parties have until 17:00 CAT on 8 January 2016 to provide written comment
on the Supplementary Memorandum read in conjunction with the Information
Memorandum, electronically at curatorfunders@africanbank.co.za. The anticipated key
dates for the finalisation of proposed transaction, subject to receiving the required
stakeholder and regulatory approvals, are:
8 January 2016 – Comment period closed
2nd Half of January 2016 – Issuance of Offer Information Memorandum
2nd Half of February 2016 – Creditor Vote participation closes
4 April 2016 – Expected launch of Good Bank
The exact timetable will be communicated at the time of the issuance of Offer
Information Memorandum. The launch date for the proposed transaction has been set
as Monday, 4 April 2016 in order to minimise operational impacts of the proposed core
business transfer to the Good Bank.
2. Financial results for the year ended 30 September 2015
Significant aspects of the audited financial results for the Bank include the following:
- The loss for the year decreased by 22% from the prior period to R7 212 million
(2014 R9 299 million).
- Adjustments relating to more conservative credit provisioning have contributed to
an additional charge of R2 420 million for the period, while the write down of the
remaining loan receivable from African Bank Investments Limited (“ABIL”) and
companies in that group have resulted in a charge for capital items of R330
million.
- Further detailed explanations are given in the audited annual financial
statements for the year ended 30 September 2015.
3. Trading Update
Disbursements of new loans and credit cards amounted to R8 180 million (2014 R16 398
million). Disbursement trends have improved over the second half of the financial year
ended 30 September 2015, averaging approximately R800 million per month for the last
quarter from July to September 2015, from a low point of averaging approximately R540
million per month for the second quarter from January to March 2015. Improved
disbursements have been achieved against a tough economic background primarily as a
result of targeted advertising and marketing campaign..
Collections have been in line with expectations and have remained stable at just under
R2 billion per month, against the background of a decreasing book.
Early risk indications continue to reflect that post Curatorship business is showing the
best trend of risk emergence since 2012.
The management and staff of the Bank remain committed and motivated as the Bank
continues on its path towards the planned launch of Good Bank on 4 April 2016.
The Curator will make further announcements related to the financial results, operations and
restructuring of African Bank in due course.
On behalf of the Curator of the Bank
Midrand
8 December 2015
Debt Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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.
Notes
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").
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 regarding the Good Bank Restructuring Proposal has been communicated to
stakeholders via an information memorandum released on 9 September 2015 ("Information
Memorandum"), details of which were provided in the SENS announcement released by
African Bank on 9 September 2015 (“Publication of Information Memorandum for the Good
Bank Restructuring Proposal and Acquisition of the Standard and General Insurance
Company Limited”).
Stakeholders are also referred to SENS announcements released by African Bank on 1
October 2015 (“Quarterly update in terms of Section 1.10(c) of the JSE Listings
Requirements”), 9 October 2015 (“Extension of comment period on Information
Memorandum”), 16 October 2015 (“Termination of proposed acquisition of the Stangen and
Supplement to Information Memorandum”), and 23 October 2015 (“Timetable to publish the
Supplement to the Information Memorandum and revision of the timeline to launch Good
Bank”).
Date: 08/12/2015 08:00:00 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.
