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ABIL - African Bank Disposes Of Commercial Vehicle Finance African Bank Investments Limited (Registration Number 1946/021193/06) (Incorporated in the Republic of South Africa) (Registered bank controlling company) Ordinary Share Code: ABL & ISIN: ZAE000030060 Preference Share Code: ABLP & ISIN: ZAE000065215 (`ABIL` or `the Company`) AFRICAN BANK DISPOSES OF COMMERCIAL VEHICLE FINANCE 1. Introduction ABIL announces that its wholly-owned subsidiary, African Bank Limited (`African Bank`), has entered into an agreement to dispose of the business of its Commercial Vehicle Finance Division as a going concern to SA Taxi Finance (Proprietary) Limited (`SA Taxi Finance`), subject to the fulfilment of certain conditions precedent, as detailed below. 2. The Disposal The Commercial Vehicle Finance division of African Bank provides finance for new taxis and arranges insurance products for those vehicles. The Commercial Vehicle Finance business, whilst profitable and growing steadily, has not yet achieved critical mass nor is the business core to the strategic focus of the ABIL Group. In addition, the taxi industry, in which this business operates, is going through a transformation process and as a consequence, the business requires intense additional management focus and capital investment. SA Taxi Finance has been established for the sole purpose of acquiring the Commercial Vehicle Finance business. The shareholders of SA Taxi Finance are indirectly, Roberto Rossi, Michael Mendelowitz and Jonathan Jawno, all former directors of subsidiaries within the ABIL Group, and David Hurwitz. The disposal of the Commercial Vehicle Finance division is regarded as a related party transaction in terms of the JSE Limited (`JSE`) Listings Requirements and as a result an opinion from an independent expert as to the fairness and reasonableness of the disposal is required in terms of the JSE Listings Requirements. Deloitte, the independent expert, has considered the terms of the disposal and is of the opinion that it is fair and reasonable, and has advised the company. The fair and reasonable statement is available for inspection at the Company`s registered office. 3. Salient Features The effective date of the disposal will be the first business day of the next month, following the month in which the last of the conditions precedent to the disposal is fulfilled. The purchase price for the disposal will be the aggregate of the adjusted net asset value of the business at the effective date and an amount of R45 million, and such purchase price will be paid in cash. The adjusted net asset value of the business as at 31 March 2005 was R210 million. As part of the transaction, African Bank is to lend to several shareholders of the acquirer R25 million which will in turn be used to further capitalise SA Taxi Finance. The loan will bear interest at 1% below the prime interest rate and is repayable, at the latest, on 1 January 2012. African Bank has also negotiated a pre-emptive right and an option to repurchase the business of SA Taxi Finance under certain circumstances over a 6 year period at a market related price to be determined at such time. 4. Conditions Precedent The implementation of the disposal is subject to the fulfilment of the following conditions precedent: a the necessary regulatory approvals being obtained; and b the disposal being approved by the Competition Authorities of South Africa. 5. Financial effects The disposal of the Commercial Vehicle Finance division will not have a significant effect on the financial position of the ABIL Group and as a result the financial effects have not been disclosed. Johannesburg 9 September 2005 Merchant bank and sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Attorneys Prinsloo, Tindle & Andropoulos Inc Legal Adviser to SA Taxi Finance MJ King Inc Date: 09/09/2005 01:51:22 PM Produced by the JSE SENS Department
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