| Mon 26 Nov 2001, 0:00 | | South African Reserve Bank - Announcement Regardin |
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Of The South African Reserve Bank And Cautionary Announcement
SOUTH AFRICAN RESERVE BANK
("the Bank")
(Incorporated in the Republic of South Africa
in terms of the South African Reserve Bank Act,
1989 (Act No. 90 of 1989)("the SARB Act"))
ANNOUNCEMENT REGARDING THE PROPOSED DELISTING OF THE SOUTH AFRICAN RESERVE
BANK AND CAUTIONARY ANNOUNCEMENT
Introduction
Since the introduction of the new Listings Requirements of the JSE
Securities Exchange South Africa ("JSE") during 2000, it has become evident
that the unique role and structure conferred on the Bank in terms of the
SARB Act does not justify either its listing on the JSE or compliance with
the JSE's Listings Requirements. In addition, current legislation does not
permit for trading in the Bank's shares to be settled through Share
Transactions Totally Electronic ("STRATE").
The Bank, which is a juristic person in the nature of a public company in
terms of the SARB Act, has had its shares listed on the JSE since its
inception in 1921. The sole advantage of being so listed has been the
facility provided by the JSE to trade in the Bank's shares.
Proposals
Consequently, after having weighed up the advantages and disadvantages of
continued listing set out in section 3 below, the Bank's directors consider
it appropriate to approach its shareholders with the proposal that the
listing of the Bank's shares be terminated from the list of the JSE.
If the proposal is implemented, shareholders will continue holding shares
in the Bank as an unlisted juristic person. Shareholders will, however, be
ensured of the capability of the continued trading of the Bank's shares by
means of the Over The Counter ("OTC") market to be established in the manner
explained in section 3 below.
Rationale
The Bank, due to its statutory nature, is unable to comply with the new
Listings Requirements on a number of fronts. The Bank's current share
capital is R2 million consisting of 2 million shares of R1 each. This share
capital structure, which is unlikely to alter, does not lend itself to the
JSE's new Listings Requirements.
As a result of the implementation of STRATE, paper settlement of JSE
trades will cease. The Bank is unable to participate in the
dematerialisation of shares for various reasons, including, inter alia, that
the current regulations in terms of the SARB Act stipulate that -
"The shareholders of the South African Reserve Bank shall be entitled to
share certificates, which shall be issued under the authority of the Board
in such manner and form as the Board shall from time to time determine. Each
share certificate shall, in order to be valid, bear upon it the seal of the
Bank and be signed by one or more directors of the Bank and the secretary."
In addition, the Bank's shares have traditionally been the subject of
very limited trading.
After allowing for certain provisions, transfers to reserves and dividend
payments to shareholders of ten per cent of paid-up capital, the surplus of
the Bank's earnings is paid to the Government of the Republic of South
Africa. The Bank's operations are therefore not driven by a motive for
profit. Unlike the case of companies normally listed on the JSE, the value
of the Bank's shares is not a reflection of the success or otherwise of the
Bank's operations.
The fact that the Bank has no need to raise additional capital on the JSE
is a further reason which justifies the proposed delisting.
It is important to note that de-listing the Bank's shares will not change
its structure as a juristic person akin to a public company or alter the
status of its shareholders. The Bank will ensure the creation of an OTC
market in which trading in its shares will be settled physically, to ensure
the continued tradability of its shares. Delisting will not prevent any
person from becoming a shareholder of the Bank in future.
The proposed delisting of the Bank as contemplated was considered by the
Board of Directors of the Bank at a meeting held in Cape Town on 9 November
2001. The Board of Directors is in support of the delisting.
Conditions precedent
The proposals in section 2 above are subject to, inter alia, the
fulfilment of the following conditions precedent -
* the requisite majority of votes being cast in favour of the delisting at a
general meeting of the Bank to be convened for such purpose; and
* the JSE furnishing such approvals as are required of them, including the
approval of the relevant documentation.
Documentation
A circular to the Bank's shareholders, containing, inter alia, details of
the proposed delisting, the salient dates pertaining thereto, details of the
proposed OTC mechanisms and a notice of a general meeting is being prepared,
and will be sent to the Bank's shareholders as soon as possible.
Shareholders of the Bank will also be advised in due course of
information briefing sessions in regard to the proposed delisting which
shall be held at the Bank's branches before the general meeting.
Cautionary announcement
Shareholders are advised to exercise caution when dealing in the Bank's
shares until an announcement has been made in respect of the salient dates.
Information
Any shareholder or member of the press or public requiring further
elucidation of the proposed delisting of the Bank's shares may communicate
with the following officials of the Bank for further information -
* Dr Johan De Jager - (General Counsel) - Telephone (012) 313 3596; or
* Mr Johannes Jacobus Rossouw - (Deputy General Manager) - Telephone (012)
313 3723 or (012) 346 2820.
Pretoria
Monday, 26 November 2001
Sponsor
Werksmans Sponsors (Proprietary) Limited
Registration Number 2000/005164/07
Attorneys to the Bank
Werksmans Incorporated
Registration Number 1990/007215/21
