| Mon 26 Nov 2001, 0:00 | | Nedcor Limited/peoples Bank/brimstone - Introducti |
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Nedcor Limited/peoples Bank/brimstone - Introduction Of The Brimstone And
Release Date: 26/11/2001 08:32:12Code(s): BRT NED NIB © 2001 SharenetClick CODE for more details on the companyThe Pai Consortium As Empowerment Shareholders Of Peoples Bank
Nedcor Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/010630/06)
("Nedcor")
Peoples Bank
FBC Fidelity Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/000929/06)
("Peoples Bank")
Nedcor Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number 1951/000009/06)
("Nedcor Bank")
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/010442/06)
("Brimstone")
INTRODUCTION OF THE BRIMSTONE CONSORTIUM AND THE PAI CONSORTIUM AS
EMPOWERMENT SHAREHOLDERS OF PEOPLES BANK
1. INTRODUCTION
The board of directors of Peoples Bank takes pleasure in announcing that
agreements have been concluded in terms of which the Brimstone Consortium
and the PAI Consortium will acquire respective interests of 20% and 10% in
Peoples Bank through a subscription for new ordinary shares ("the
transaction").
2. Description of Peoples Bank
Subject to regulatory approval, Nedcor Bank has created South Africa's
tenth largest bank with assets of R8 billion through the disposal of its
Peoples Bank and NedEnterprise Divisions to its subsidiary FBC Fidelity Bank
Limited.
Peoples Bank is focused on the low to middle income retail market and in
the SME segment, providing the following affordable and accessible financial
products and services:
* Retail - transmission accounts, home loans, personal loans, secured micro-
loans, assurance products and the "debt consolidator";
* Enterprise - franchising, funding to empowerment initiatives, corporate
outsourcing, start-up and ongoing finance whether by way of asset-based or
overdraft finance.
The introduction of empowerment shareholders represents a further key step
in the implementation of Peoples Bank's strategy of growing the earnings of
the bank on a sustainable basis through:
* a demographically representative staff profile;
* the servicing of the bank's broadly-based, historically disadvantaged
shareholders', joint venture partners' and alliance partners' diverse
distribution channels;
* Nedcor Bank's outstanding operational capability.
2.1 Broad base of historically disadvantaged shareholders
Each of the following consortia members are in the process of entering
into commercial agreements with Peoples Bank in terms of which Peoples Bank
will reward measured enhancements its business.
2.1.1 The Brimstone Consortium
Shareholding Description
Brimstone 8% * A leading empowerment group in South Africa
* Since its listing as an investment trust in 1998,
Brimstone has become a focused
financial services company
* Brimstone has joint ventures with Santam
(The Lion of Africa) and Coronation Capital
(BrimEquity)
NUMSA 3% * Established in April 1997
Investment * Proceeds from investment activities are
Company managed by a trust set up to benefit the members
of Numsa, their families and the community at large
* 240 000 members
SARHWU 3% * Established to take advantage of investment
Investment opportunities in the transformation of
Holdings South Africa to benefit members and their
families and the community at large
* 120 000 members
NASASA 2% * The National Stokvels Association of
Investment & South Africa was established in order to promote
Finance Company stokvels
* The NASASA investment arm was formed in 1993
to generate commercial benefits for its membership
* 150 000 individual members and 14 000 stokvels
WDB 2% * Women's Development Bank's investment
Investment company makes equity investments in order
Holdings to generate income to advance their social
investment activities
* 10 000 individuals have been trained or
have benefited from job creation
* 20 000 business loans have been extended
DECT 2% * The Disability Employment Concerns Trust
was established to take advantage of
investment opportunities in order to benefit
its broad membership base
* 4,8 million beneficiaries
2.2.2 The PAI Consortium
Shareholding Description
AMI 4% * AMI represents corporate professionals, entrepreneurs,
the SA Association of Youth Clubs, the Adult Educators
and Trainers Association of South Africa and the
South African Council of the Aged
* Since Lot Ndlovu (a director of Nedcor, Nedcor Bank
and Peoples Bank), Alan Mukoki (a director of
Peoples Bank) and Chris Mamabolo and Jimmy Manyi
(both members of Peoples Bank's senior management)
are shareholders of AMI, a resolution will be proposed
to Nedcor shareholders at Nedcor's forthcoming
annual general meeting to ratify AMI's participation
in the transaction.
BMF 3% * The Black Management Forum is the premier
Investment and oldest organisation focused on the
Company development of the managerial talent of black
South Africans
* The Black Management Forum is the premier and
oldest organisation focused on the development of the
managerial talent of black South Africans
* 5 000 individual members and 200 corporate members
PYIC 3% * Established to create a platform of youth empowerment,
training and entrepreneurial development through
investment activities
* Profits generated go towards education, vocational
training, self-employment and sports and recreation
projects benefiting the targeted youth
* 300 000 individuals
2.2 Joint venture and alliance partners
To augment its traditional branch infrastructure and network of ATMs,
Peoples Bank has created channels of distribution through joint ventures and
alliances with the following diverse and credible partners:
Capital One Corporation - focused on provision and development of
personal (micro) loans and credit cards.
* Proven credit marketing in underserved markets;
* Information-based credit scoring and selling;
* Market leader in credit cards;
* 38 million customers globally;
Old Mutual Group Schemes - a "one stop" environment for the purchase of all
financial services products.
* Provision of investment products;
* strong in public sector;
* close market fit to Peoples Bank;
* OMGS representatives in Peoples Bank branches and vice versa; and
* 900 000 customers.
JD Group - Peoples Bank products will be sold to existing JD customers with
known payment history.
* Financial services for customers;
* Over 400 financial services kiosks (to be branded Peoples Bank); and
* 645 stores/2,5 million customer database.
2.3 Operations
Through service level agreements with Nedcor Bank, Peoples Bank will have
access to Nedcor Bank's infrastructure, including its technology and cost
effective funding.
3. Terms of the transaction
The Brimstone Consortium and the PAI Consortium will acquire respective
interests of 20% and 10% in Peoples Bank through a subscription for new
ordinary shares in the aggregate amount of R569,3 million.
The effective date of the transaction is 1 January 2002.
Nedcor is entitled to appoint a majority of the directors and has
nominated Richard Laubscher, Nedcor's chief executive officer, as Chairman
of the board of directors. For as long as the Brimstone Consortium owns not
less than 20% and the PAI Consortium not less than 10% of the issued
ordinary share capital of Peoples Bank, Brimstone is entitled to appoint two
non-executive directors, the Brimstone Consortium to appoint two non-
executive directors, AMI to appoint one non-executive director and the PAI
Consortium to appoint one non-executive director.
4. Funding the transaction
Funding agreements have been entered into with the following financial
institutions ("the funders") to provide funding for the transaction:
* Old Mutual Specialised Finance (Proprietary) Limited;
* Deutche Bank AG London Branch;
* FirstRand Bank Limited (through its Rand Merchant Bank division);
* Sanlam Life Insurance Limited (through the Sanlam Development Fund); and
* Nedcor Investment Bank Limited.
The funders will invest in preference shares issued by separate special
purpose vehicles set up by each of the consortia members to hold their
interest in Peoples Bank. After the third anniversary of the date that the
preference shares are issued, the funders are entitled to transfer the
preference shares they hold to Nedcor Bank in consideration for either
Nedcor shares ("the Nedcor exchange") or an equivalent cash consideration.
The JSE Securities Exchange South Africa ("the JSE") has ruled that the
Nedcor exchange will constitute an issue under Nedcor's general authority to
issue shares for cash and that Nedcor must obtain an opinion from an
independent professional expert indicating that the terms of the Nedcor
exchange are fair and reasonable for Nedcor shareholders. The JSE has
furthermore ruled that reference must be made to such fair and reasonable
opinion in Nedcor's annual financial statements for the year ending 31
December 2002.
5. Implementation
It is anticipated that the transaction will be implemented on 2 January
2002.
Johannesburg
23 November 2001
NUMSA Investment Company (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/005691/07)
("NUMSA Investment Company")
Africa Milestone Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/007552/06)
("AMI")
Black Management Forum Investment Company
(Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/000296/07)
("BMF Investment Company")
SARHWU Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1995/010775/06)
("SARHWU Investment Holdings")
NASASA Investment & Finance Company
(Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/002411/07)
("NASASA Investment & Finance Company")
Progressive Youth Investment Company
(Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/021771/07)
("PYIC")
(collectively, "the Brimstone Consortium")
WDB Investment Holdings (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/017647/07)
("WDB Investment Holdings")
Disability Employment Concerns
Disability Employment Concerns Trust
(Master's reference number IT3700/97)
("DECT")
Investment bank to Nedcor and co-equity arranger
Nedcor Investment Bank
Corporate law advisers and consultants
Edward Nathan & Friedland (Pty) Ltd
(Registration number 1999/026464/07)
Financial adviser to the consortia and co-equity arranger
African Harvest Capital (Pty) Ltd
Fundraisers to the transaction
Old Mutual Specialised Finance
Sanlam
Deutsche Securities
Member of the Deutsche Bank Group
Deutsche Securities (SA) (Proprietary) Limited
(Registration number 1995/011798/07)
Nedcor
Firstrand
