CADIZ HOLDINGS LIMITED
Cadiz Holdings Limited announces that it has, in its capacity as a bank
controlling company, initiated discussions with the Registrar of Banks with
regard to the the cancellation of the banking license presently held in the
name of Cadiz Investment Bank Limited ("the bank"), a wholly owned
subsidiary of Cadiz Holdings Limited. There will be no adverse liquidity
impact given that substantially all of the secured and unsecured deposits of
the bank have already been repaid and the bank still maintains a high
liquidity buffer.
With de-registration of the bank, the role of Bill Scotcher who was the CEO
of the bank will change. Bill will take up a non-executive position on the
board of Cadiz Holdings Limited and will enter into an exclusive contract to
pro-actively advise and assist in the development of the Cadiz Group. This
contract will ensure continuity for the Cadiz Group and is a reflection of
the fact that the relationship between Cadiz Holdings Limited and Bill
Scotcher is amicable.
Excluding the recent successful launch of an offshore structured investment
for retail investors, all business of Cadiz Holdings Limited and its
subsidiaries are conducted in the wholesale and corporate markets. The
wholesale banking and money market activities in the bank were very limited.
These are the only Cadiz Group activities that will no longer be pursued
following de-registration of the bank.
The core businesses of Cadiz Holdings Limited revolve around the conception,
marketing and implementation of derivative-based solutions to the asset
management, pension fund, corporate and parastatal markets. These and the
derivative-based asset management activities under which Cadiz Specialised
Asset Management manage in excess of R4 billion, are not in any way
dependent on the banking license.
Management and the board of directors of Cadiz Holdings Limited are of the
firm opinion that the existing and proposed business of the Cadiz Group can
be realised without further need for the banking license. They have
confidence in the abilities of these businesses to endure and see the
envisaged de-registration of the bank and the associated events as being
positive decisions that are appropriate in the prevailing and anticipated
market conditions.
The envisaged de-registration of the bank is seen as a decisive step towards
focusing the Cadiz Group's core businesses on areas where there is clear
competitive advantage. A positive impact is expected on the core businesses
that will strengthen the platform for the desired growth into the future.
Pursuant to the de-registration of the bank, it is proposed that a small
number of other staff associated with the bank and related activities will
be retrenched. The effect of de-registration of the bank on Cadiz Group
earnings will be positive but insignificant.
The de-registration of the bank will be subject to shareholder approval in
terms of the Banks Act, 1990 (Act No. 94 of 1990) and registration of the
necessary special resolutions in terms of the Companies Act, 1973 (Act No.
61 of 1973), whereafter de-registration will be affected. Shareholders will
be advised by circular of the date of a general meeting at which their
approval will be sought.
Cape Town
18th June 2001
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