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MERCANTILE LISBON BANK HOLDINGS LIMITED - DETAILS OF CAIXA`S GUARANTEE AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
MERCANTILE LISBON BANK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000164/06)
JSE Code: MTL
ISIN: ZAE000015541
("Mercantile" or "the company")
DETAILS OF CAIXA`S GUARANTEE AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcement dated 1 July 2002, in
which it was stated that agreement had been reached between Caixa Geral
de Depositos ("Caixa") and the South African Reserve Bank ("the SARB")
regarding the terms of a guarantee supporting Mercantile`s capital
requirements ("the guarantee").
The guarantee has now been formalised, the salient terms of which are
set out below.
2. SALIENT TERMS OF THE GUARANTEE
In terms of an agreement between Caixa and Mercantile, Caixa has
undertaken to guarantee the recovery of certain specifically identified
non-performing advances in Mercantile`s advances book against which
provisions have been made in the financial year ended 31 March 2002.
The effect of the guarantee is to render unnecessary the provisions
raised in respect of the underlying advances. Such provisions may
therefore be reversed with effect from 8 July 2002, being the effective
date of the guarantee, thereby increasing the reserves of Mercantile by
R265 000 000 and restoring the company`s capital to a level of 11.95%,
which exceeds the SARB`s requirements.
3. PRO FORMA FINANCIAL EFFECTS
The guarantee was established with effect from 8 July 2002. The effect
of the guarantee on Mercantile`s balance sheet, based on the assumption
that it was in existence at 31 March 2002, is set out in the table
below.
Actual Pro forma
Before the After the
guarantee guarantee
31 March 31 March
2002 2002
R`000(1) R`000(2)
Assets
Cash and short-term funds 212 047 212 047
Negotiable securities 242 997 242 997
Loans and advances 1 475 609 1 740 609
Interest in associated companies 3 246 3 246
Investments 19 560 19 560
Other assets 233 531 233 531
Property, equipment and 121 832 121 832
intangible assets
Total assets 2 308 822 2 573 822
Liabilities
Deposit and credit balances 2 085 712 2 085 712
Other liabilities 207 193 207 193
Total liabilities 2 292 905 2 292 905
Shareholders` equity
Share capital 866 865 866 865
Reserves (850 948) (585 948)
Total shareholders` funds 15 917 280 917
Total liabilities and 2 308 822 2 573 822
shareholders` funds
Loss per share (cents) (151) (89)
Headline loss per share (124) (62)
(cents)
Net asset value per 1.86 32.83
share (cents)
Capital ratio (%) 1.05 11.95
Assumptions:
1. The loss per share, headline loss per share, net asset value per share
and capital ratio as set out in the "Before the guarantee" column are
based on the audited earnings and headline earnings for the 12 months
ended 31 March 2002 and the audited net asset value at 31 March 2002.
2 The loss per share and headline loss per share as set out in the "After
the guarantee" column have been calculated based on the assumption that
the guarantee was in place from 1 April 2001. The net asset value per
share and capital ratio have been calculated based on the assumption
that the guarantee was in place on 31 March 2002.
4. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that, having regard for the details of the
guarantee set out above, caution is no longer required when dealing in
their Mercantile shares.
Johannesburg
8 July 2002
Merchant bank
SCMB
Sponsor
Bridge Capital Services (Proprietary) Limited
(Registration number 1998/016301/07)
(A sponsor registered with the JSE Securities Exchange South Africa)
Date: 08/07/2002 05:16:11 PM Produced by the JSE SENS Department
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