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Specific repurchase of Nedbank Group ordinary shares
Nedbank Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
('Nedbank Group' or 'the Company')
SPECIFIC REPURCHASE OF NEDBANK GROUP ORDINARY SHARES
1 Introduction and background
In line with Nedbank Group's long-standing commitment to transformation, the Company
introduced Nedbank Group's Namibian broad-based black economic empowerment
('BEE') transaction in 2006 ('the Namibian BEE Transaction'). The Namibian BEE
Transaction facilitated broad-based black Namibian ownership equating to 11,13% of the
then value of NedNamibia Holdings Limited ('NedNamibia Holdings'). The Namibian BEE
Transaction was designed to accelerate operational transformation, extending to
employment equity, client acquisition and strategies for underserved markets, to benefit a
broad base of black Namibians throughout the country, including employees,
entrepreneurs and communities.
The Namibian BEE Transaction was implemented before the finalisation of the Namibian
Financial Sector Charter of 2009 as part of a proactive, industry-led initiative to transform
the financial services sector. It was based on Nedbank Group's comprehensive,
overarching approach to transformation in alignment with principles of Nedbank Group's
South African BEE transaction approved by shareholders in 2005.
The introduction of broad-based black Namibian ownership into NedNamibia Holdings in
2006 was effected by the issue of new Nedbank Group ordinary shares ('Shares') to
various black stakeholders, including among others:
- strategic business partners comprising Central Consortium SPV Three Investments
Proprietary Limited ('Central Consortium SPV'), Coastal Consortium SPV Three
Investments Proprietary Limited ('Manmar SPV') and the Northern Empowerment
SPV Three Investments Proprietary Limited ('Northern Empowerment Investments
SPV') (collectively 'the Strategic Business Partner SPVs');
- strategic community partners comprising the Southern Consortium SPV Three
Investments Proprietary Limited ('Churches SPV') and the Eastern Consortium SPV
Three Investments Proprietary Limited ('WAD SPV') (collectively 'the Strategic
Community Partner SPVs');
- an education trust, being the Old Mutual and Nedbank Namibia Education Trust
('Education Trust'); and
- the NedNamibia Holdings Discretionary Trust ('NedNamibia Holdings Discretionary
Trust') in support of future long-term strategic initiatives.
The Strategic Business Partner SPVs, the Strategic Community Partner SPVs, the
Education Trust and the NedNamibia Holdings Discretionary Trust are collectively
referred to as 'External Stakeholder SPVs'.
This announcement outlines various transactions that will result in the rationalisation of
the External Stakeholder SPVs in accordance with the constitutional documents of the
Namibian BEE Transaction. The rationalisation will include the winding up of existing
schemes that have reached their maturity dates and will result in the realisation of value
for various BEE stakeholders.
2 Specific Repurchase
As part of the process of terminating components of the original Namibian BEE
Transaction, Nedbank Group will repurchase a number of Shares held by the External
Stakeholder SPVs, based on formulas that were originally agreed on as part of the
Namibian BEE Transaction ('the Specific Repurchase').
This will result in the Specific Repurchase of 552 246 Shares from the External
Stakeholder SPVs as described below.
2.1 Terms of the Specific Repurchase
The Specific Repurchase will take place on or about 8 June 2017 as follows:
2.1.1 the repurchase from the Central Consortium SPV of:
2.1.1.1 118 476 Shares at a price of R2,53 per share at a total amount
of R300 000;
2.1.1.2 31 679 Shares at a total amount of R1;
2.1.2 the repurchase from the Manmar SPV of:
2.1.2.1 44 429 Shares at a price of R2,53 per share at a total amount
of R112 500;
2.1.2.2 11 879 Shares at a total amount of R1;
2.1.3 the repurchase from the Northern Empowerment Investments SPV of:
2.1.3.1 37 024 Shares at a price of R2,53 per share at a total amount
of R93 750;
2.1.3.2 9 900 Shares at a total amount of R1;
2.1.4 the repurchase from the Churches SPV of:
2.1.4.1 37 024 Shares at a price of R1 per share at a total amount of
R37 024;
2.1.4.2 10 302 Shares at a total amount of R1;
2.1.5 the repurchase from the WAD SPV of:
2.1.5.1 37 024 Shares at a price of R1 per share at a total amount of
R37 024;
2.1.5.2 10 302 Shares at a total amount of R1;
2.1.6 the repurchase from the Education Trust of:
2.1.6.1 98 730 Shares at a total amount of R1; and
2.1.6.2 11 858 Shares at a total amount of R1.
2.1.7 the repurchase from the NedNamibia Holdings Discretionary Trust of:
2.1.7.1 81 452 Shares at a price of R1 per share at a total amount of
R81 452;
2.1.7.2 12 167 Shares at a total amount of R1;
After the Specific Repurchase, the Shares will be delisted, cancelled and
reinstated as authorised but unissued Shares.
The Specific Repurchase represents 0,1% of Shares currently in issue, being
498 661 160 Shares.
The Specific Repurchase will reduce the number of treasury Shares by 552 246
Shares from 17 168 431 to 16 616 185 Shares.
2.2 Shareholder approvals for the Specific Repurchase
In terms of the JSE Limited ('JSE') Listing Requirements and section 48 of the
Companies Act, 71 of 2008 ('the Companies Act'), the Specific Repurchase was
approved by shareholders at the general meeting of Nedbank Group held on
7 December 2006 and ratified on 18 May 2017 to the extent as required under the
Companies Act of 2008.
2.3 Statement by the board of directors of Nedbank Group ('the Board')
After considering the effect of the Specific Repurchase, the Board is of the opinion
that:
2.3.1 the Company and Nedbank Group will be in a position to repay their debt
in the ordinary course of business for a period of 12 months after the date
of the Specific Repurchase;
2.3.2 the Company's and Nedbank Group's assets will be in excess of the
liabilities of the Company and Nedbank Group for a period of 12 months
after the date of the Specific Repurchase (for this purpose the assets and
liabilities have been recognised and measured in accordance with the
accounting policies used in the latest audited consolidated annual
financial statements);
2.3.3 the share capital and reserves of the Company and Nedbank Group will
be adequate for ordinary business purposes for a period of 12 months
after the Specific Repurchase; and
2.3.4 the working capital of the Company and Nedbank Group will be adequate
for ordinary business purposes for a period of 12 months after the
Specific Repurchase.
The Board further acknowledges that it has applied the solvency and liquidity test
as set out in section 4 of the Companies Act and has reasonably concluded that
Nedbank Group will satisfy the solvency and liquidity test immediately after the
Specific Repurchase.
2.4 Source of funds
The Specific Repurchase will be funded from existing cash resources and no
external borrowings will be used.
3 Impact of the Specific Repurchase on financial information
3.1 The Specific Repurchase has no significant impact on the consolidated financial
position of Nedbank Group other than:
3.1.1 Before the Specific Repurchase the External Stakeholder SPVs held
726 502 Shares, which were reported as treasury Shares. A total of
552 246 of these Shares will be repurchased from the External
Stakeholder SPVs, cancelled and delisted. After the Specific Repurchase
140 915 of the remaining Shares in the External Stakeholder SPVs will no
longer be accounted for as treasury Shares.
3.1.2 After the Specific Repurchase the number of issued Shares will decrease
by 552 246 Shares to 498 108 914 Shares.
3.1.3 The Specific Repurchase will result in a total consideration payable by
Nedbank Group of R 661 758. The NedNamibia Holdings Discretionary
Trust will continue to be consolidated into Nedbank Group's financial
information after the Specific Repurchase. Therefore the net cash outflow
from Nedbank Group will be R 580 305.
3.2 The effect of the Specific Repurchase on the Shares and diluted Shares will be
accounted for in Nedbank Group's financial results from 8 June 2017.
4 Salient dates of the Specific Repurchase
The salient dates for the Specific Repurchase are as follows:
2017
Specific Repurchase of a total of 552 246 Shares from the Thursday, 8 June
Trusts, on or about
Cancellation and delisting of 552 246 Shares, on or about Thursday, 15 June
Sandton
1 June 2017
Investment Bank, Corporate Advisor and Sponsor:
Nedbank CIB
Sponsor to Nedbank Group in South Africa:
Merrill Lynch South Africa Proprietary Limited
Sponsor to Nedbank Group in Namibia:
Old Mutual Investment Services (Namibia) Proprietary Ltd
Date: 01/06/2017 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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