SASFIN HOLDINGS LIMITED - Acquisition Of Absa Technology Finance Solutions Proprietary Limiteds Loan Book And Cautionary Announcemen

Acquisition Of Absa Technology Finance Solutions Proprietary Limited’s  Loan Book And Cautionary Announcemen

SASFIN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002097/06)
Share Code: SFN ISIN Number: ZAE000006565
Preference Share Code:SFNP        ISIN Number: ZAE000060273
(“Sasfin” or “the Company”)



ANNOUNCEMENT REGARDING THE ACQUISITION OF ABSA TECHNOLOGY FINANCE
SOLUTIONS PROPRIETARY LIMITED’S (“ATFS”) LOAN BOOK AND CAUTIONARY
ANNOUNCEMENT


1.    INTRODUCTION
Sasfin shareholders (“Shareholders”) are advised that Sasfin or its nominee (“Purchaser”)
has concluded a binding offer with ATFS, in terms of which the Purchaser will acquire ATFS’
entire loan book (“Acquisition”), subject to certain conditions precedent. The entire loan
book comprises loans and rental contracts including non-performing loans (“NPL”), loans
eligible for securitisation (“Eligible Loan(s)”) and loans not eligible for securitisation (“Non-
Securitisable Loan(s)”) (herein after referred to collectively as the “Loan Book”). In
addition to acquiring the Loan Book, Sasfin will take on ATFS’ staff and acquire ATFS’
information technology (“IT”) systems related to the management of the Loan Book.

2.    THE ACQUISITION

2.1     Nature of ATFS’ business
        ATFS provides discounting and direct financing solutions to suppliers and
        discounting partners secured against technology rental agreements.


2.2     Rationale for the Acquisition
        The Acquisition affords the Sasfin group the opportunity to grow its rental book and
        acquire a new customer base.


2.3     Consideration for the Acquisition
        The consideration for the Loan Book at the Effective Date (as defined below) will be
        determined by applying agreed prime-linked discount rates to the variable and fixed
        rate portions of the Eligible and Non-Securitisable Loan Books (“Price Mechanism”).


        Sasfin or its nominee will take over for nominal consideration all NPL at the Effective
        Date, determined in accordance with ATFS policies and procedures consistently
        applied.
        For indicative purposes only, the consideration for the Loan Book, including the NPL,
        at 31 December 2016 as determined in accordance with the Price Mechanism was
        R1 458 468 446. The final consideration for the Loan Book at the Effective Date may
        necessarily be higher or lower than this amount as determined using the Pricing
        Mechanism.


        Sasfin has further offered a nominal amount for the IT systems, including all sub-
        programs, data and any ancillary systems required for the effective management of
        the Loan Book.


2.4     Settlement of the Acquisition consideration
        The Acquisition consideration will be payable in cash on the Effective Date of the
        Acquisition. The Eligible Loans purchase will be financed by securitising the Eligible
        Loans through the South African Securitisation Programme (RF) Limited (“SASP”), a
        special purpose securitisation vehicle administered by, and for the benefit of Sasfin,
        which will be regulated in the Definitive Agreements.


        The Non-Securitisable Loans purchase will be settled from existing facilities and/or
        resources.

2.5     Conditions precedent and Effective Date
        The Acquisition is subject to the fulfilment or waiver of conditions precedent 2.5.1 and
        2.5.2 by no later than 30 April 2017 and conditions precedent 2.5.3 to 2.5.8 by no
        later than 30 June 2017 or such later date/s as may be agreed by the parties:


2.5.1   the drafting, negotiation and execution of all and any mutually satisfactory definitive
        agreements required to give effect to the Acquisition, which agreements will include
        conditions, representations, warranties, indemnities and other terms that are
        customary for a transaction of this nature (collectively, "Definitive Agreements");


2.5.2   the approval by the board of directors of Sasfin, ATFS and the relevant Barclays
        Africa Group Limited internal governance committees of the binding terms of the
        Definitive Agreements;


2.5.3   regulatory approvals to the extent required (including Competition Commission) and
        shareholder approvals as required by Sasfin and ATFS as may be the case;


2.5.4   a comprehensive credit rating to be performed by Global Credit Rating Co. to the
        satisfaction of Sasfin acting reasonably;
2.5.5   the aforementioned credit rating to confirm that at least 90% of the Loan Book by
        value will constitute Eligible Loans meeting the eligibility criteria of SASP at the
        Effective Date;


2.5.6   the consent of all relevant third parties to the transfer or change in control of all
        material contracts, leases, supply agreements, and intellectual property, where
        required;


2.5.7   fulfilment of the requirements in accordance with section 197 of the Labour Relations
        Act of 1995; and


2.5.8   SASP confirming in writing to Sasfin and ATFS that it has secured the necessary
        investor commitments required for the purchase of the Eligible Loans by SBL.


     The effective date shall be the first business day of the calendar month following
     fulfilment of the final condition precedent or other date as agreed to by the parties
     (“Effective Date”).

3.   THE NET ASSETS AND PROFITS ATTRIBUTABLE TO THE LOAN BOOK
     The audited value of the net assets that are the subject of the Acquisition and the
     audited profit after tax attributable to such net assets are still being finalised and will be
     provided to Shareholders in due course. Accordingly, Shareholders are advised to
     exercise caution when dealing in the Company’s securities until this information is made
     available.


4.   CATEGORISATION OF THE ACQUISITION
     The Acquisition is a Category 1 transaction in terms of the JSE Limited Listings
     Requirements and therefore requires Shareholder approval. A circular incorporating a
     notice convening a general meeting and setting out information regarding the
     Acquisition will be despatched to Shareholders in due course.

     Johannesburg
     13 March 2017



     Lead Sponsor to Sasfin
     Sasfin Capital (a division of Sasfin Bank Limited)
     Independent Sponsor to Sasfin
     KPMG Services Proprietary Limited

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