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ABIL Acquires Remaining 50% Of TEBA Credit (Proprietary) Limited
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`)
ABIL ACQUIRES REMAINING 50% OF TEBA CREDIT (PROPRIETARY) LIMITED FROM TEBA BANK
LIMITED
1. Introduction
ABIL announces that its wholly-owned subsidiary, Theta Investments Limited,
has entered into an agreement to acquire the remaining 50% of TEBA Credit
(Pty) Limited (`TEBA Credit`) from TEBA Bank Limited (`TEBA Bank`), subject
to the fulfilment of certain conditions precedent, as detailed below.
2. The acquisition
TEBA Credit was a joint venture established in 2000 between the ABIL Group
and TEBA Bank to provide unsecured personal loans to employees in the
mining community. It has been agreed to dissolve the joint venture, in
order to allow the two groups to provide financial services to the mining
community independently of each other and to concentrate on their
respective core strategic focuses.
3. Salient features
The purchase price of the transaction is an amount equal to 50% of the net
asset value of TEBA Credit as at 28 February 2005 plus R20 million. The
effect of the transaction will be to increase gross advances by R165
million and impairment provisions by R23 million.
In addition, the agreement contains the following operational terms:
- TEBA Credit will have the right to continue to operate from those
outlets, which were previously run for and on behalf of TEBA
Credit by TEBA Bank;
- TEBA Credit will continue to utilise TEBA Bank`s TSDN system as
its primary collection platform;
- after a pre-determined period from completion date neither party
may use the brand name `TEBA Credit` for the provision of
unsecured personal loans; and
- TEBA Bank will be entitled to compete freely in the provision of
financial services to employees in the mining community.
It is the intention of the ABIL Group to divisionalise the TEBA Credit
business into African Bank, subject to regulatory approval, and to operate
the business under the African Bank Miners Credit brand.
The completion date of the transaction will be the date on which the
conditions precedent are fulfilled, and this is expected to be before the
end of September 2005.
4. Conditions Precedent
The implementation of the agreement is subject to the following suspensive
conditions, namely:
- the approval of the Registrar of Banks; and
- the requisite approval in terms of the Competition Act.
5. Financial effects
The acquisition 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)
Legal adviser to ABIL
Prinsloo, Tindle & Andropoulos Inc
Date: 09/09/2005 01:53:11 PM
Produced by the JSE SENS Department
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