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SBK
SBK
Standard Bank - Selection Process for Regional Business and Community
Groupings as Participants in the Black Ownership Initiative
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
Share code: SBK Namibian share code: SNB
ISIN: ZAE000057378
("Standard Bank" or "the Company")
SELECTION PROCESS FOR REGIONAL BUSINESS AND COMMUNITY GROUPINGS AS PARTICIPANTS
IN THE BLACK OWNERSHIP INITIATIVE IN STANDARD BANK
1. INTRODUCTION
On 19 January 2006 Standard Bank announced that a process was being embarked
upon to identify and select the regional business and community groupings that
would be the beneficiaries of the 20.1 million Standard Bank ordinary shares
owned by the Tutuwa Community Trust. The Tutuwa Community Trust is a trust
formed for the benefit of regional business and community groupings, and is one
of the participants in the broad based grouping of black entities that acquired
an effective 10% interest in the South African banking operations of Standard
Bank in the black ownership initiative transaction announced on 15 July 2004.
The participation rights in the Tutuwa Community Trust were allocated in
accordance with the following split:
- 50% to regional businesses that are owned and controlled by black people
(as defined in the Finance Sector Charter) operating in the small and medium
sized enterprises ("SME") sector ("the regional business component"); and
- 50% to community development groupings whose activities benefit black
people ("the community development component").
The process that was embarked on as per the announcement on 19 January 2006
involved the identification and selection of regional businesses in the SME
sector to participate in the regional business component, while the selection
process of participants in the community development component was to be
announced at a later stage.
2. OBJECTIVE
In the identification and selection of participants in the regional business
component the objective was twofold:
- to identify and select operational SMEs that inter alia contribute directly
- to the alleviation of unemployment on a sustainable basis by employing
at least 10 people on a permanent basis; and
- to target a total of approximately 250 SMEs from all the nine provinces of
South Africa in an equitable manner. To this extent it was believed that
this could be achieved by using the formula developed by the Finance and
Fiscal Commission ("FFC developed formula"). The FFC is a statutory
institution whose mission is to act as an independent and impartial
institution that gives advice and makes recommendations to parliament,
provincial legislatures, and other relevant authorities or organs of state,
on matters affecting intergovernmental fiscal relations. As such the
Trustees believed that the FFC developed formula was a reliable tool that
could be used in carrying out equitable distributions to provinces.
In addition to the overall objective, it was the intention of the trustees of
the Tutuwa Community Trust ("the Trustees") that the applicant SMEs be entities
that have sustainable business models, given that the benefits of the black
ownership initiative would only be available to the selected participants in the
long term.
3. OUTCOME OF REGIONAL BUSINESS COMPONENT PROCESS
The Trustees are pleased to announce that following the opening of the
application process relating to the regional business component 526 applications
were received, of which 242 met the qualifying criteria ("qualifying
applications"). Although the combined number of qualifying applications received
from all the provinces was close to the total target of approximately 250, the
provinces of Gauteng, KwaZulu Natal and Western Cape were oversubscribed ("the
oversubscribed provinces") while the number of qualifying applications received
from the other six provinces was less than the provincial targets set ("the
underrepresented provinces").
All the qualifying applications from the underrepresented provinces have
therefore been successful, while in the oversubscribed provinces only the
highest scoring qualifying applications (i.e., up to the required target number
as set using the FFC developed formula) have been successful. The names of the
SMEs that have been successful will only be publicised after the outcome of
certain initiatives by the Trustees to increase the number of qualifying
applications from the underrepresented provinces ("the further initiatives").
4. THE FURTHER INITIATIVES
The Trustees remain committed to meeting the initial objective of having a broad
base of participants from all the nine provinces of South Africa. In an effort
to achieve this objective further initiatives to attract more applications ("new
applications") will be undertaken in the underrepresented provinces, and such
further initiatives will be carried out without compromising the qualifying
criteria. These further initiatives in the underrepresented provinces will
include additional publicity and a more active search of applicants through any
other means which the Trustees may deem appropriate. For the avoidance of doubt,
the qualifying applications from the underrepresented provinces that have
already been determined as successful will remain so, notwithstanding the new
applications that may be received.
In the event that the further initiatives do not result in the number of
qualifying applications meeting or exceeding the required provincial targets,
the Trustees have the right to award the remaining participation rights to those
qualifying applications in the oversubscribed provinces that have not been
awarded participation rights ("excess qualifying applications"). In such event
the scores of the excess qualifying applications will be taken into account. To
this extent the Trustees have retained the services of SizweNtsaluba VSP to
assist with the receipt and scoring of the new applications to be received.
5. FINAL ANNOUNCEMENT
The names of all the SMEs that have been awarded participation rights in the
Tutuwa Community Trust will be made public in an announcement to mark the
completion of the identification and selection of participants in the regional
business component of the Tutuwa Community Trust. It is anticipated that the
final announcement will be published in the press during November 2006.
6. COMMUNITY DEVELOPMENT COMPONENT PROCESS
For the community development component the Trustees are currently establishing
a community foundation that will be a sustainable independent institution with a
secure capital base, long-term cash flow and have ongoing allocations to
specific (or broadly defined) activities that will benefit primarily black
people especially those living in rural areas. As far as possible, existing
community structures will be used in such allocations. These will be identified
and prioritised via a research programme to be conducted in the near future.
Further details on the community development component will be contained in the
above mentioned announcement during November 2006.
Johannesburg
28 July 2006
Investment bank and joint sponsor
Standard Bank
Legal adviser
Bowman Gilfillan Attorneys
Independent lead sponsor
Deutsche Securities
Independent consultant to the Trustees
SizweNtsaluba VSP
Date: 28/07/2006 10:44:22 AM Produced by the JSE SENS Department
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