| Wed 6 Nov 2002, 17:46 | | AMBH - Application for deregistration of banking l |
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AMBH - Application for deregistration of banking license, Trading Update &
Cautionary Announcement
AMB HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/003054/06)
Share code AMB ISIN ZAE000029682
("AMBH" or "the Company")
Announcement in respect of intention to apply for deregistration of banking
licence and incorporating a trading update and cautionary announcement
Introduction
AMBH shareholders are referred to the cautionary announcements published on 26
August 2002 and 14 October 2002. AMBH shareholders are advised that these
cautionary announcements related to various discussions that had been, and are,
taking place between AMBH and third parties, whereby the latter could
potentially become strategic shareholders of the Company.
Banking licence
The Board of Directors of AMBH is, however, of the view that in the current
environment, and without a suitable shareholder of reference, the costs
associated with African Merchant Bank Limited ("AMB") retaining its banking
licence far exceed the current benefits. In addition, the removal of the
constraints associated with various regulatory, statutory and liquidity
requirements applying to banks and their controlling companies, will result in a
more optimal use of the capital of AMBH and AMB and facilitate participation in
opportunities which will enhance returns on equity to shareholders. Hence, the
Board of Directors of AMBH has taken the decision to proceed with the
cancellation of the registration of AMB as a bank. AMBH is currently consulting
with the South African Reserve Bank and the Registrar of Banks as to the process
and timing for the repayment of all deposits and the termination of its banking
activities. A more detailed announcement will be made in this regard in due
course.
The boards of AMBH and AMB have satisfied themselves that AMB has sufficient
surplus liquidity to repay all deposits on demand, when required. Existing
depositor and counterparty obligations will continue to be serviced in the
normal course of business until the licence is formally cancelled.
The proposed cancellation of the registration of AMB as a bank will primarily
impact the deposit-taking, lending and foreign exchange licence activities of
AMB. Going forward, AMBH`s operations will focus on three main areas:
* advisory services, including corporate finance, public finance, debt
origination and treasury products;
* fund management, primarily through AMB Capital Management (Pty) Limited (the
fund manager of AMB Private Equity Partners Limited) and AMB Foord Asset
Management (Pty) Limited; and
* proprietary trading.
Trading update
AMBH shareholders are advised that additional provisions will be created at
year end against the carrying value of certain investments on AMBH`s balance
sheet, to reflect the impairment of the value of such assets as at 30 September
2002. This, together with the difficult trading conditions facing the A2 banking
sector and the additional costs associated with cancelling the banking licence,
will have an adverse effect on the financial results for the year ended 30
September 2002, which will be significantly below those achieved in the prior
year.
Cautionary announcement
AMBH shareholders are advised to continue to exercise caution in dealing in
their shares, until such time as a further announcement is made in this regard.
It is anticipated that AMBH`s financial results for the year ended 30 September
2002 will be published on or about 11 December 2002.
6 November 2002
Illovo
Sponsor
African Merchant Bank Limited
Registered Bank
Registration number 1996/016470/06
Date: 06/11/2002 05:43:00 PM Produced by the JSE SENS Department
