| Mon 14 Mar 2005, 8:58 | | ABIL - Terms Announcement |
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ABIL - Terms Announcement
AFRICAN BANK INVESTMENTS LIMITED
(Registration number 1946/021193/06)
(Incorporated in the Republic of South Africa)
Ordinary share code: ABL ISIN: ZAE000030060
Preference share code: ABLP ISIN: ZAE000065215
(`ABIL` or `the Company`)
TERMS ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcement published on the Securities
Exchange News Service (`SENS`) on 18 October 2004, whereby they were advised
that the ABIL board of directors (`the Board`) was investigating the feasibility
of utilising preference shares to facilitate part of a Black Economic
Empowerment transaction to be concluded by ABIL (`the BEE transaction`). The
Board is pleased to announce that it has concluded this investigation and has
resolved to raise equity through the private placement of variable rate non-
redeemable, non-cumulative, non-participating ABIL preference shares
(`preference shares`).
ABIL concluded an agreement with FirstRand, acting through its Rand Merchant
Bank division (`RMB`), whereby RMB agreed to underwrite the issue of 4 000 000
preference shares to be issued in terms of the private placement at a
subscription price of R100 each (`the private placement`).
ABIL has accepted irrevocable undertakings from investors to subscribe for 5 000
000 preference shares to be issued in terms of the private placement at a
subscription price of R100 each, thereby raising R500 million.
2. Information on ABIL
ABIL`s strategy is to underwrite and fund largely unsecured credit risk through
the provision of personal loans to the formally employed emerging market and
tailored credit solutions to small, medium and micro enterprises (`SMMEs`). The
Company`s profitability and sustainability is dependent on its ability to
underwrite this risk and efficiently manage the collections process.
3. Rationale
ABIL actively manages its capital base in order to enhance shareholder value
through its internal economic capital model. The issue of the preference shares
will further optimise the level and structure of ABIL`s capital base. ABIL will
evaluate the application of the funds raised through the issue of the preference
shares with particular regard to the following options:
* the funding of the BEE transaction, while maintaining an overall level of
unimpaired qualifying regulatory capital that meets ABIL`s internal
economic capital model and which in the opinion of the directors is deemed
appropriate for the activities of the Company;
* the utilisation of the funds in its general capital management programme;
and
* providing ABIL with funding for strategic initiatives and other growth
opportunities.
Decisions in respect of the application of the funds raised through the issue of
the preference shares will be communicated to shareholders in due course.
4. Particulars of the private placement
The particulars of the private placement are set out below:
Subscription price per preference share (Rand) 100
Minimum subscription amount per applicant acting as 100 000
principal (Rand)
Number of preference shares placed 5 000 000
Amount to be raised in terms of the private 500 000 000
placement (Rand)
Effective dividend yield 69% of prime
5. Listing on the JSE Securities Exchange South Africa (`JSE`)
The JSE has granted ABIL a listing of 5 000 000 preference shares as follows:
JSE sector: Specialist Securities - `Preference Shares`
Abbreviated name: `ABIL PREF`
Share code: ABLP
ISIN: ZAE000065215
Ordinary shareholders of ABIL have passed the necessary resolutions relating to
the creation and issue of the preference shares. The special resolutions passed
by ordinary shareholders at the annual general meeting of ABIL held on 11 March
2005 were registered with the Registrar of Companies on 11 March 2005.
The preference shares will be listed on the JSE at 9:00 on Wednesday 23 March
2005. The proposed listing date is subject to change. Any changes will be
published on SENS and in the press.
6. Share capital of ABIL
The authorised and issued share capital of ABIL, before and after the private
placement, assuming that all the preference shares up to an aggregate value of
R500 000 000 are allotted and issued, are set out below:
Before the private placement
R 000
Authorised share capital
1 000 000 000 ordinary shares of R0,025 25 000
5 000 000 non-redeemable, non-cumulative, non- 50
participating preference shares of R0,01 each
Total authorised share capital 25 050
Issued share capital
477 155 565 ordinary shares of R0,025 11 929
Total issued share capital 11 929
Share premium
On 477 155 565 ordinary shares of R0,025 292
Total share premium 292
After the private placement
R 000
Authorised share capital
1 000 000 000 ordinary shares of R0,025 25 000
5 000 000 non-redeemable, non-cumulative, non- 50
participating preference shares of R0,01 each
Total authorised share capital 25 050
Issued share capital
477 155 565 ordinary shares of R0,025 11 929
5 000 000 non-redeemable, non-cumulative, 50
non-participating preference shares of R0,01 each
Total issued share capital 11 979
Share premium 292
On 477 155 565 ordinary shares of R0,025
On 5 000 000 non-redeemable, non-cumulative, 499 950
non-participating preference shares of R0,01 each
Total share premium 500 242
7. Salient features of the preference shares
The preference shares are non-redeemable, non-cumulative and non-participating.
The salient features of the preference shares are set out below:
7.1. Voting rights
The holders of the preference shares shall not be entitled to vote unless
either of the following circumstances prevail at the date of the meeting:
* when a preference dividend which has been declared, or any part
thereof, remains in arrears and unpaid for seven days; or
* when a resolution of ABIL is proposed which directly affects the
rights attached to the preference shares or the interests of the
preference shareholders (which specifically includes a resolution
relating to the disposal by ABIL of the whole or substantially the
whole of its business or assets).
7.2. Entitlements to dividends
Preference shareholders will receive, if declared, an annual dividend
equivalent to 69% of the prime rate quoted by the Standard Bank of South
Africa Limited multiplied by the subscription price of R100 multiplied by
the number of preference shares held by a preference shareholder.
Preference share dividends are payable at approximately six monthly
intervals when ABIL announces its interim and final financial results. The
announcement of the interim and final financial results has historically
been in May and November of each year which is anticipated to continue in
the future. ABIL will not declare an ordinary dividend for the period in
question unless the preference share dividend for such period has been
declared in full.
7.3. Changes to the prime rate
The preference dividend will not be adjusted for any changes in the prime
rate between the day before the dividend declaration date, if a dividend is
so declared, and the dividend payment date. ABIL undertakes that the period
between the dividend declaration date and the dividend payment date will
not exceed 20 business days.
8. Copies of the placement document
Copies of the placement document can be obtained during normal business hours
from the date of issue of this placement document up to 9:00 Wednesday 23 March
2005, from:
the registered office of ABIL
59 16th Road
Halfway House
Midrand
or
the adviser, arranger, underwriter and joint sponsor
RMB
1 Merchant Place
Corner Fredman Drive and Rivonia Road
Sandton
or
the lead sponsor
Deutsche Securities (SA) (Proprietary) Limited
3rd Floor
3 Exchange Square
87 Maude Street
Sandton
or
the transfer secretaries
Ultra Registrars (Proprietary) Limited
11 Diagonal Street
Johannesburg
Alternatively, an electronic copy of the placement document can be obtained from
www.africanbank.co.za.
Johannesburg
14 March 2005
Underwriter, arranger, adviser and joint sponsor
RAND MERCHANT BANK (A Division of FirstRand Bank Limited)
CORPORATE FINANCE
Attorneys
Prinsloo, Tindle & Andropoulos Inc.
Lead sponsor
Deutsche Securities
Member of the Deutsche Bank Group
Date: 14/03/2005 08:00:05 AM
Produced by the JSE SENS Department
