| Thu 10 Dec 2009, 17:00 | | Sbk - Standard Bank - Planned Amendment Of Certain Terms Of Standard Bank`s |
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SBK
SBK
Sbk - Standard Bank - Planned Amendment Of Certain Terms Of Standard Bank`s
Black Share Ownership Initiative
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
JSE share code: SBK
NSX share code: SNB
ISIN: ZAE000109815
("Standard Bank")
Planned amendment of certain terms of Standard Bank`s black share ownership
initiative
Given the strategic importance to Standard Bank of its black share ownership
initiative, shareholders are hereby advised of plans to amend certain terms of
the initiative.
The black share ownership initiative was implemented in October 2004 and has
been significantly successful to date in creating wealth for black shareholders.
As a consequence of Standard Bank`s share price performance and the positive
impact of the ICBC transaction, the preference share debt funding provided by
Standard Bank to the black share ownership initiative (expressed on a "per
Standard Bank ordinary share" basis) currently represents approximately R34.73
per share compared to a closing Standard Bank ordinary share price of R98.50 at
9 December 2009. This equates to a 2.8 times financial cover ratio. The
aggregate value of the preference share debt outstanding is R3,062 million.
The black share ownership initiative has accordingly been significantly
successful, with value created for black shareholders in excess of R6,000
million, based upon a Standard Bank ordinary share price of R98.50. Under
current arrangements, participants are not, until 1 January 2015, able to access
any of the value in the scheme, as participants may not provide their interests
in the black ownership structures as collateral for borrowings and cash flows
remain with the schemes to repay the preference share funding.
Standard Bank has proposed to the trustees and representatives of the black
ownership initiative that it will permit dividends paid on Standard Bank
ordinary shares and received by the black ownership structures to flow through
to the participants in those structures, subject to:
- a minimum two times ordinary share price cover being maintained on the
outstanding preference share funding obligation at the date of declaration
of each ordinary dividend; and
- the term of the preference share funding provided by Standard Bank being
reduced from the original agreed 20 years to a maximum 15 years.
It is Standard Bank`s view that these amendments will provide scheme
participants access to a limited portion of the initiative`s built up value,
whilst not exposing Standard Bank to undue risk on the outstanding preference
share funding provided. The financial impact on Standard Bank`s shareholders
due to the delayed repayment of the preference share debt will not be
significant and will partially be compensated for by the reduction of the term
of the preference share funding.
These amendments are subject to the approval of the trustees or shareholders of
the respective black ownership structures and certain administrative steps, but
are expected to be completed in the first quarter of 2010, with the first flow-
through of ordinary dividends expected to occur with respect to the final
dividend for the financial year ended 31 December 2009, which is scheduled to be
paid in early April 2010.
Johannesburg
10 December 2009
Investment Bank and Sponsor
Standard Bank
Independent sponsor
Deutsche Securities (SA) (Pty) Ltd
Date: 10/12/2009 17:00:01 Produced by the JSE SENS Department.
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