| Wed 2 Mar 2016, 10:00 | | AFRICAN BANK LIMITED - African Bank Restructuring: Comprehensive Results Announcement of the Exchange Offer Process |
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ABLS2A ABLI05 ABLI06 ABLI04 ABLSI1 ABL17 ABL16 ABL19 ABLS4 ABLS5 ABLS3 ABL13 ABL15 ABLS2B 201603020019A
African Bank Restructuring: Comprehensive Results Announcement of the Exchange Offer Process
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 Restructuring: Comprehensive Results Announcement of the Exchange Offer Process
The Curator is pleased to announce that the proposed restructuring of African Bank has received the
overwhelming support of the creditors of African Bank, following the substantial completion of the
Exchange Offer process. Further detail is provided in this announcement.
Capitalised terms used but not defined in this announcement have the meaning given to them in the
Offer Information Memorandum.
In summary:
1. More than 50% by value of the Existing Senior Debt Instruments have elected to make an
Exchange Offer to African Bank, meaning that the minimum acceptance threshold for the
proposed restructuring to proceed has been attained. In aggregate, the percentage of those
holding Existing Senior Debt Instruments who elected to make an Exchange Offer is 95.40%
of eligible creditors by value.
2. More than 75% by value of the Existing Subordinated Debt Instruments have elected to
make an Exchange Offer to African Bank, meaning that the proposed restructuring for
Existing Subordinated Debt Instruments may proceed, subject to fulfillment or waiver (if
applicable) of the remaining Suspensive Conditions referred to below. In aggregate, the
percentage of those holding Existing Subordinated Debt Instruments who elected to make
an Exchange Offer is 99.99% of eligible creditors by value.
3. For each series of notes issued under the African Bank Domestic Medium Term Note
Program (“DMTNs”) and each series of notes issued under the African Bank Euro Medium
Term Note Program (“EMTNs”, being USD Dollar and CHF EMTNs) the relevant Extraordinary
Resolutions were passed, so that if the proposed restructuring proceeds, all parties holding
such notes will participate in the Exchange Offer. In respect of the DMTNs, the Bank intends
(subject to the Settlement Condition) to effect the Series Exchange Offer in respect of all
(and not only some) of the Existing Notes in each Series. In respect of the EMTNs, the Bank
intends (subject to the Settlement Condition) to accept Existing Notes for exchange through
exercise of the Mandatory Exchange Options.
For the African Bank Restructuring to proceed, a number of Suspensive Conditions remain to be
fulfilled, including the consent of the Minister of Finance and the listing of the proposed Good Bank
notes on the Johannesburg Stock Exchange (“JSE”), London Stock Exchange (“LSE”) and Swiss Stock
Exchange, as applicable. The detailed conditions are included in the Exchange Offer documentation,
while the Suspensive Conditions currently unfulfilled are listed in this notice. The Curator will
update the market as to the status of such matters in due course, however at this stage the target
Transaction Effective Date for the commencement of the Good Bank operations and settlement of
the Exchange Offers remains 4 April 2016, and the Redemption Record Date / Record Date
(applicable only to the existing EMTNs and Senior DMTNs respectively) is expected to be 16 March
2016.
This is a significant milestone in the delivery of the African Bank Restructuring and the Curator
thanks the creditors for their continued support.
Offer Notice
On 4 February 2016, the Curator of African Bank announced, via the Johannesburg Stock Exchange
News Service (“SENS”), the issue of exchange offer documentation to creditors of African Bank
("Exchange Offer Documents"), which included an invitation to offer to exchange their Existing Debt
Instruments in African Bank for, amongst other things, New Debt Instruments in Good Bank through
a one-on-one exchange offer process, a series exchange offer process or an amendment proposal, as
the case may be, (all on the terms set out in the Exchange Offer Documents) ("Exchange Offers")
(“Publication of Exchange Offer Documents and Offer Information Memorandum for the African
Bank Restructuring”, hereinafter “the Offer Notice”). The Offer Notice was also made on the London
Stock Exchange via the Regulatory News Service (“RNS”) platform and the Swiss Stock Exchange via
the Swiss Securities Services Corporation (“SIX”) platform on the same day. Exchange Offer
Documents in respect of bilateral corporate instruments not held in the Strate platform were sent
directly to holders thereof or the relevant investment managers.
The Offer Notice also contained details of the noteholder meetings in respect of the existing senior
and subordinated DMTNs and the existing EMTNs. These noteholder meetings were held on 29
February 2016 and 1 March 2016 and have now concluded.
Individual announcements related to the results of the meetings held in respect of each series of
notes listed on the JSE, LSE and SIX were posted at the conclusion of the relevant meeting, as were
summary end-of-day announcements in respect of the results of the meetings of all existing senior
DMTNs, all existing subordinated DMTNs and all existing EMTNs, on the electronic news services
operated in respect of the relevant exchanges. The announcements confirmed that each proposed
Extraordinary Resolution was passed and received creditor support in respect of each series of
existing DMTNs and EMTNs issued by African Bank.
Comprehensive Results/Acceptance Announcement
The Curator is pleased to announce the following:
Sufficient Senior Funder Support
That the holders of 95.40% of the Existing Senior Debt Instruments made Senior Exchange Offers to
African Bank. This comfortably exceeds the minimum threshold of 50% required by the Curator for
the proposed restructuring to proceed.
For reference the requirement for Sufficient Senior Funder Support is included in Section 3.7.2 of the
Offer Information Memorandum (“OIM”) published in terms of the Offer Notice.
Extraordinary Resolutions passed for each series of EMTNs and senior DMTNs
For each series of EMTNs and senior DMTNs, sufficient support was received to pass the relevant
Extraordinary Resolution, meaning that if the African Bank Restructuring proceeds, all holders of
notes in each series of EMTNs and senior DMTNs will participate in the Exchange Offer, regardless of
whether they participated in the relevant vote, or the Exchange Offer.
The relevant series of senior DMTNs listed on the JSE are the following:
Bond Code ISIN Number
ABL10A ZAG000065053
ABL11A ZAG000080946
ABL10B ZAG000065061
ABL11B ZAG000080938
ABL12B ZAG000084500
ABL13 ZAG000089863
ABL14 ZAG000100371
ABL15 ZAG000100389
ABL16 ZAG000104183
ABL17 ZAG000106600
ABL18 ZAG000109307
ABLI9 ZAG000109323
ABLI03 ZAG000076068
ABLI04 ZAG000080953
ABLI05 ZAG000102872
ABLI06 ZAG000107228
The relevant series of EMTNs listed on the LSE are the following:
Bond Code ISIN Number
ABLSJ 2.4 03/17/15 XS1046228950
ABLSJ 6 06/15/16 XS0638008051
ABLSJ 8 1/8 02/24/17 XS0751016865
The relevant series of EMTNs listed on SIX are the following:
Bond Code ISIN Number
ABLSJ 4 11/09/16 CH0199541308
ABLSJ 4 3/4 07/24/16 CH0190227691
ABLSJ 5 1/2 10/11/17 CH0224486578
ABLSJ 5 08/28/18 CH0236907868
Successful fulfillment of Subordinated Exchange Offer conditions
The holders of 99.99% of the Existing Subordinated Debt Instruments made Exchange Offers to
African Bank. This comfortably exceeds the requirement that the implementation of the
Subordinated Exchange Offer, but not the African Bank Restructuring as a whole, was subject to
more than 75% in value of all Existing Subordinated Debt Instruments being exchanged in terms of
the Subordinated Exchange Offer.
For reference the Subordinated Exchange Offer conditions were included in Section 3.4.3 of the OIM
published in terms of the Offer Notice.
Extraordinary Resolutions achieved for each series of subordinated DMTNs
For each subordinated note series, sufficient support was received to achieve an Extraordinary
Resolution threshold, meaning that if the African Bank Restructuring proceeds, all holders of notes in
each series of subordinated DMTNs will participate in the Exchange Offer.
Bond Code ISIN Number
ABLS2A ZAG000069493
ABLS2B ZAG000069501
ABLS3 ZAG000085119
ABLS4 ZAG000094244
ABLS5 ZAG000096744
ABLSI1 ZAG000096819
Acceptance by the Bank
The Bank hereby gives notice that:
- In respect of the DMTNs and EMTNS it intends (subject to the Suspensive Conditions
being satisfied or waived) to exercise Series Exchange Offers (DMTNs)/ to accept Existing
Notes for exchange through exercise of the Mandatory Exchange Options (EMTNs); and
- In respect of all other Exchange Offers it hereby accepts the Exchange Offers validly
made to it which acceptance remains subject to the Suspensive Conditions being
satisfied or waived, (if applicable) on or before 30 June 2016.
Currently unfulfilled Suspensive Conditions
The final implementation of the African Bank Restructuring is subject to the fulfillment or waiver (if
applicable) of the remaining Suspensive Conditions listed below by or before 29 March 2016, or such
later date as the Curator and Good Bank may agree in writing (provided that such date shall not be
extended beyond 30 June 2016).
If the Suspensive Conditions are not satisfied or waived, if applicable, on or before 30 June 2016 the
Exchange Offers will not be implemented, and no Existing Debt Instruments will be exchanged.
A Suspensive Condition may only be waived if: (i) such waiver will not result in African Bank or Good
Bank contravening any law if the African Bank Restructuring is implemented without fulfilment of
such Suspensive Condition; and (ii) both African Bank and Good Bank have reached agreement to
that effect in writing.
The detailed Suspensive Conditions are listed in the OIM, and include the following Suspensive
Conditions which have not been fulfilled or waived (if applicable) as at the date of this notice:
Regulatory Conditions
- The consent by the Minister of Finance to:
- the transfer of the Good Bank Business to Good Bank, as required in terms of sections 54
and 69(2C) of the Banks Act; and
- the subscription by SARB for New HoldCo Shares, as required in terms of section 13(b) of
the Reserve Bank Act 90 of 1989 (as amended).
- The Registrar of Banks acting alone or acting together with the Minister (where required):
- granting Good Bank's application for registration as a bank in terms of section 17 of the
Banks Act;
- granting New HoldCo's application for registration as a bank controlling company in
respect of Good Bank in terms of section 44 of the Banks Act;
- approving the acquisition of InsureCo as a wholly owned Subsidiary by New HoldCo in
terms of section 80 of the Banks Act;
- granting such other permissions, consents, registrations and/or approvals as may be
required in terms of the Banks Act for the lawful implementation of the African Bank
Restructuring; and
- granting such other approvals, permissions, registrations and/or consents as may be
required in terms of the Financial Services Regulatory Act and/or the Insurance Act, if
either or both of the Financial Services Regulatory Bill or the Insurance Bill are
promulgated into law by or before the Transaction Effective Date.
- Approval by the Registrar of Long-Term Insurance in terms of section 26 of the Long-Term
Insurance Act, 1998 for the indirect change of control of the Good Bank Cell as a result of the
implementation of the subscription agreement pursuant to which the Consortium will capitalise
New HoldCo with ZAR10 billion.
- Approval by the JSE of:
- the registration of the Good Bank DMTN programme; and
- the listing of the Good Bank DMTNs.
- Approval of the base prospectus for the Good Bank EMTN programme by the UK Listing
Authority in compliance with the Prospectus Directive and relevant implementing measures in
the United Kingdom for the purposes of giving information with regard to Good Bank and the
issue of Good Bank EMTNs.
- Approval of the Swiss listing prospectuses in relation to each of the Good Bank CHF
denominated EMTNs to be issued under the Good Bank EMTN programme in compliance with
the listing rules of the SIX and the applicable provisions of the Swiss Code of Obligations by the
SIX.
Financial Viability of African Bank Restructuring
That African Bank confirms in writing that, to the best of its knowledge and belief, the sum total of
African Bank's own cash and the amount that can be drawn in terms of the SARB Transaction Loan is
and will be sufficient to enable African Bank: (i) to discharge the Transaction Effective Date expenses
(as per section 3.5 of the OIM); (ii) to establish the Operating Float at the level reasonably required
by African Bank as at that date; and (iii) to adjust or increase the Top-Up Cash Amount after the
Transaction Effective Date based on the actual review and true-up process that will be performed by
Good Bank after the Transaction Effective Date, as projected based on information and
circumstances within the knowledge of African Bank as at the date of the confirmation, which
confirmation shall not be issued by African Bank more than 3 Business Days before 29 March 2016
(or any later long-stop date agreed between African Bank and Good Bank in writing).
No Material Adverse Event Notice
That Good Bank has not, by or before 17:00 on 29 March 2016 (or any later long-stop date agreed
between African Bank and Good Bank in writing), delivered a material adverse event notice to
African Bank in terms of the Sale of Business Agreement.
Insurance Arrangement
That the Curator confirms in writing that he is reasonably satisfied that an arrangement is in place
with a cell captive insurer, other registered long-term insurer or otherwise, that will (together with
any run-off arrangement with Stangen) enable Good Bank to arrange or maintain adequate credit
life insurance for its loan book (including the Good Book) after the Transaction Effective Date.
Execution of New HoldCo Capitalisation Agreement
That the subscription agreement for the ZAR10 billion capitalisation of New HoldCo becomes
unconditional.
For reference the full list of the Suspensive Conditions to the African Bank Restructuring (including
Section 3.7.2. Sufficient Senior Funder Support) were included in Section 3.7 of the OIM published in
terms of the Offer Notice.
Senior DMTNs and EMTNs unblocked
As a consequence of passing the Extraordinary Resolutions for all series of Senior DMTNs and all
series of EMTNs, all existing Senior DMTNs/EMTNs in each such series which are blocked in the
clearing systems will be unblocked from the time of this announcement until but excluding the
Record Date (Senior DMTNs)/Redemption Record Date (EMTN’s). A Record Date (Senior
DMTNs)/Redemption Record Date (EMTN’s) of 16 March 2016 is anticipated. This will be confirmed
in due course.
Subordinated DMTNs continue to be blocked
All the existing subordinated DMTNs in a series are blocked from the time of the passing of the
relevant Extraordinary Resolution (each passed on 1 March 2016) until the earlier of (i) the
settlement of the relevant Exchange Offer (if the Suspensive Conditions are fulfilled or waived (if
applicable) on or before 30 June 2016); or (ii) 1 July 2016 (if the Suspensive Conditions are not
fulfilled or waived (if applicable) on or before 30 June 2016); or (iii) the termination of the exchange
offers.
Further detail
Further details of the Exchange Offers can be accessed by accessing the OIM and the related
Exchange Offer Documents at https://www.africanbank.co.za/about-us/investors.
Interested parties are referred to the section of the above website entitled “Corporate Restructuring
– Exchange Offer Documentation”. The disclaimer presented to the reader upon accessing the
relevant section of the above website should be carefully read and the appropriate response given.
Timetable and further announcements
African Bank will provide market updates as the African Bank Restructuring develops. At this time
the timetable as outlined in the Exchange Offer documents remains the target, including a
Transaction Effective Date of 4 April 2016.
Interested parties can contact the Curator at curatorfunders@africanbank.co.za should they require
further information not available through the communication channels described in this
announcement.
Please also refer to the Note below this announcement regarding relevant disclaimers thereto.
On behalf of the Curator of African Bank.
Midrand
02 March 2016
Debt Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Mr. 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.
Note : Disclaimers
NOT FOR DISTRIBUTION TO ANY PERSON LOCATED IN THE UNITED STATES OR INTO ANY
JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. RESTRICTIONS ARE
APPLICABLE (SEE “Offer and Distribution Restrictions” BELOW).
Offer and Distribution Restrictions
Neither this announcement nor any Exchange Offer Documents constitute an offer or an invitation
to participate in the Exchange Offers in any jurisdiction in or from which, or to any person to whom,
it is unlawful to make such offer or invitation under applicable laws. The distribution of this
announcement and/or any Exchange Offer Document may be restricted by law in certain
jurisdictions. Persons into whose possession this announcement or the Exchange Offer Document
comes are required by each of the Bank, Good Bank, the Curator, the SARB, the Registrar of Banks
and the Exchange Agent to inform themselves about, and to observe, any such restrictions.
South Africa
None of the Exchange Offers, this announcement, any Exchange Offer Documents or any other
document or materials relating to the Exchange Offers do, nor are they intended to constitute (i) an
“offer to the public” (as such expression is defined in the South African Companies Act); or (ii) a
prospectus prepared and registered under the South African Companies Act. The Exchange Offers
are made by or to, as the case may be, Holders of Existing Notes and on a non-renounceable basis as
contemplated in section 96(1)(c) of the South African Companies Act.
United States
The offers of the securities referred to in this announcement and the Exchange Offer Documents
have not been and will not be registered under the United States Securities Act of 1933 (“Securities
Act”). In particular, unless expressly set out in the Exchange Offer Document(s), the Exchange Offers
are not being made to any person located in the United States. The securities referred to in the
Exchange Offer Documents may not be offered or sold in the United States unless an exemption
from the registration requirements of the Securities Act is available. No public offering of such
securities will be made in the United States.
United Kingdom
This announcement and any Exchange Offer Document may only be communicated to persons in the
United Kingdom in circumstances where section 21(1) of the Financial Services and Markets Act 2000
does not apply. Accordingly, inside the United Kingdom this announcement and any Exchange Offer
Document are only for circulation to persons who fall within one of the following categories:
(i) a person who is a Holder of any Existing Notes; or
(ii) any other person also falling within Article 43(2) or within Article 49(2)(a) to (d) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), falling within
the definition of “investment professionals” (as defined in Article 19(5) of the Order) or any
other person to whom the Exchange Offer may otherwise lawfully be made under the Order.
This announcement and the Exchange Offer Document are only available in the United Kingdom to
such persons, and the transactions contemplated herein will be available only to, and may be
engaged in only with, such persons.
Belgium
The Exchange Offers may not be made, and are not being made, in the Kingdom of Belgium (i) by
way of an offer of securities to the public, as defined in Article 3 § 1 of the Belgian Law of 16 June
2006 on the public offering of securities and the admission of securities to trading on a regulated
market (Loi relative aux offres publiques d’instruments de placement et aux admissions
d’instruments de placement à la négociation sur des marchés réglementés / Wet op de openbare
aanbieding van beleggingsinstrumenten en de toelating van beleggingsinstrumenten tot de
verhandeling op een gereglementeerde markt) (the “Prospectus Law”) nor (ii) by way of a public
takeover bid, as defined in Article 3 § 1 of the Belgian Law of 1 April 2007 on public takeover bids
(Loi relative aux offres publiques d’acquisition / Wet op de openbare overnamebiedingen) (the
“Public Takeover Law”).
The Exchange Offers will be conducted in the Kingdom of Belgium under applicable private
placement exemptions in accordance with the Prospectus Law and the Public Takeover Law and
therefore neither the Exchange Offers, this announcement nor the Exchange Offer Document have
been notified to the Belgian Financial Services and Markets Authority (Autorité des services et
marchés financiers / Autoriteit voor Financiële Diensten en Markten) (“Belgian FSMA”) nor has this
announcement, any Exchange Offer Document or any other information circular, brochure or similar
document relating to the Exchange Offers been, nor will it be, approved by the Belgian FSMA.
Accordingly, the Exchange Offers are not being made, directly or indirectly, to, or for the account of,
any person (individual or legal entity) other than “qualified investors” within the meaning of Article
6, paragraph 3 of the Public Takeover Law and Article 10 of the Prospectus Law.
France
The Exchange Offers are not being made, directly or indirectly, to the public in the Republic of
France (“France”). Neither this announcement, any Exchange Offer Document nor any other
documents or materials relating to the Exchange Offers have been or shall be distributed to the
public in France and only (i) providers of investment services relating to portfolio management for
the account of third parties (“personnes fournissant le service d'investissement de gestion de
portefeuille pour compte de tiers”) and/or (ii) qualified investors acting for their own account
(“Investisseurs Qualifiés”) as defined in and in accordance with Articles L.411-1, L.411-2 and D.411-1
to D.411-3 of the French Code Monétaire et Financier are eligible to participate in the Exchange
Offers described herein. Neither this announcement, any Exchange Offer Document nor any other
offering material relating to the Exchange Offers has been submitted to the clearance of the Autorité
des marchés financiers.
Italy
None of the Exchange Offers, this announcement, any Exchange Offer Document or any other
document or materials relating to the Exchange Offers have been submitted to the clearance
procedures of the Commissione Nazionale per le Società e la Borsa (“CONSOB”) pursuant to Italian
laws and regulations. Each Exchange Offer is being carried out in Italy as an exempted offer pursuant
to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended
(the “Financial Services Act”) and article 35-bis, paragraph 3, of CONSOB Regulation No. 11971 of 14
May 1999, as amended (the “CONSOB Regulation”). The Exchange Offers are also being carried out
in compliance with article 35-bis, paragraph 7 of the CONSOB Regulation. Holders or Beneficial
Owners of Existing Notes that are located in Italy can exchange Existing Notes through authorised
persons (such as investment firms, banks or financial intermediaries permitted to conduct such
activities in Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29
October 2007, as amended from time to time, and Legislative Decree No. 385 of 1 September 1993,
as amended) and in compliance with applicable laws and regulations or with requirements imposed
by CONSOB or any other Italian authority. Each intermediary must comply with the applicable laws
and regulations concerning information duties vis-à-vis its clients in connection with the Existing
Notes or the Exchange Offers.
Switzerland
The Exchange Offers (other than in relation to the CHF existing notes) are not being made, directly or
indirectly, to the public in Switzerland and the relevant Good Bank Notes (other than the Good Bank
CHF notes) and Senior Stub Instruments will not be listed on the SIX Swiss Exchange or on any other
exchange or regulated trading facility in Switzerland. Neither this announcement, any Exchange
Offer Document nor any other offering or marketing material relating to the Exchange Offers
constitutes a prospectus with respect to the Existing Notes (other than in relation to the CHF existing
notes) or the relevant Good Bank Notes and Senior Stub Instruments as such term is understood
pursuant to article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus
within the meaning of the listing rules of the SIX Swiss Exchange or any other regulated trading
facility in Switzerland and may not comply with the information standards required thereunder.
The ability of Holders of CHF Existing Notes who are not resident in Switzerland to accept the
Exchange Offer may be affected by the laws of the relevant jurisdiction in which they are located or
of which they are citizens. Persons who are not resident in Switzerland should inform themselves of,
and observe, any applicable legal or regulatory requirements of their jurisdictions. Neither this
announcement, the Exchange Offer Document nor any other marketing material relating to the
Exchange Offers constitutes a prospectus with respect to the CHF Existing Notes or the relevant
Good Bank CHF Notes and Senior Stub Instruments within the meaning of article 652a or article 1156
of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the
SIX Swiss Exchange or any other regulated trading facility in Switzerland and may not comply with
the information standards required thereunder.
General
The distribution of this announcement and the Exchange Offer Document may be restricted by law
in certain jurisdictions. Persons into whose possession this announcement and/or the Exchange
Offer Document come are required to inform themselves about and to observe any such restrictions.
This announcement and the Exchange Offer Document do not constitute, and may not be used for
the purpose of, an offer or solicitation to the public or to anyone in any jurisdiction in which such
offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or
solicitation.
Date: 02/03/2016 10:00:00 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.
