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SBK
SBK
Standard Bank- Selection process for regional business and community groupings
Standard Bank Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
JSE share code: SBK
Namibian share code: SNB
ISIN: ZAE000057378
("Standard Bank")
SELECTION PROCESS FOR REGIONAL BUSINESS AND COMMUNITY GROUPINGS AS
PARTICIPANTS IN STANDARD BANK"S BLACK OWNERSHIP INITIATIVE
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 as
follows:
- 50% to regional businesses that are owned and controlled by black people
(as defined in the Financial 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").
A further announcement on 27 July 2006 stated that although a high number of
applications that met the qualifying criteria ("qualifying applications")
had been received in total, the provinces of Gauteng, KwaZulu-Natal and
Western Cape were oversubscribed ("the oversubscribed provinces") while the
number of qualifying applications received from the remaining six provinces
was less than the provincial targets set ("the under-represented
provinces"). The announcement further stated that the Trustees of the
Tutuwa Community Trust ("the Trustees") remained committed to meeting the
initial objective of having a broad base of participants from all the nine
provinces of South Africa and as such were going to undertake some
initiatives ("the further initiatives") to increase the number of
applications from the under-represented provinces. In the event that the
further initiatives did not result in the number of qualifying applications
meeting or exceeding the required provincial targets, it was stated that
the Trustees would reserve the right to award the remaining participation
rights to those qualifying applications in the oversubscribed provinces
that had not been awarded participation rights ("excess qualifying
applications").
As far as the community development component was concerned, it was
announced that the Trustees were in the process of establishing a community
foundation that would be a sustainable independent institution with a
secure capital base, long-term cash flow and on-going allocations to
specific activities that will benefit primarily black people living in
rural areas. Further details on the community development component were to
be contained in an announcement at a later date.
2. 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 and the
further initiatives in the under-represented provinces, approximately 600
applications were received, of which 270 were qualifying applications.
Although the combined number of qualifying applications received from all
the provinces exceeded the total target of approximately 250, the number of
qualifying applications received from the under-represented provinces
remained less than the provincial targets set, although the shortfalls were
significantly reduced after new applications were received as a result of
the further initiatives.
In order to address the remaining shortfall in the under-represented
provinces after the further initiatives, excess qualifying applications,
ranked in order of the scores they achieved, have been taken into account
in increasing the number of successful participants to 250. Those excess
qualifying applications that have not been allocated participation rights
in the Tutuwa Community Trust have been retained by the Trustees on a
reserve list of qualifying applicants from which beneficiaries will be
selected should the current successful SMEs fail to comply with the on-
going conditions. On-going conditions are that each successful SME must:
- continue to be black-owned as defined in the Financial Sector Charter, as
amended from time to time;
- remain a going concern - it must not be liquidated, deregistered or
otherwise cease to exist;
- not cede, use for security, mortgage, pledge or otherwise encumber its
entitlement to benefit from the Tutuwa Community Trust;
- not cease conducting business; and
- become an incorporated entity within 6 months of this announcement, if at
the time of application, it was a sole proprietorship or a partnership.
The table below shows the numbers of SMEs in each province that will receive
participation rights in the regional business component of the Tutuwa
Community Trust.
Province Allocations
Eastern Cape 29
Free State 15
Gauteng 77
KwaZulu Natal 54
Limpopo 13
Mpumalanga 13
North West 17
Northern Cape 2
Western Cape 24
Under final review 6
Total 250
The combined turnover of the successful SMEs was approximately R1.7 billion
in 2005 and the SMEs have more than 10 000 permanent employees in various
sectors of the economy. In this regard, the Trustees are satisfied that the
outcome of the regional business component has achieved the objective of
identifying and selecting operational SMEs that contribute directly to the
alleviation of unemployment on a sustainable basis, as well as the
objective of having a broad base of participants from all the nine
provinces of South Africa. This therefore marks the completion of the
identification and selection of participants in the regional business
component of the Tutuwa Community Trust.
3. THE COMMUNITY DEVELOPMENT COMPONENT
The final component of the black ownership initiative is the community
development component. To this effect, Standard Bank is establishing a
community foundation ("the Foundation") which will be an independent, not-
for-profit, sustainable organisation that will administer the community
development component of the Tutuwa Community Trust. The Foundation is
intended to address the needs of primarily black communities in areas that
are predominantly rural.
The objectives of the Foundation are to:
- stimulate economic growth by providing capacity building in rural
environments occupied by predominantly poor people; and
- create a legacy by being an endowment that lasts into perpetuity, while
actively supporting social development programmes.
Specific beneficiaries and initial areas to be financed and supported will
be identified via a research programme to be embarked upon in 2007-2008.
Johannesburg
2 November 2006
Investment bank and joint sponsor
Standard Bank
Legal adviser
Bowman Gilfillan
Independent consultant to the Trustees
SizweNtsaluba VSP
Independent lead sponsor
Deutsche Securities (SA) (Pty) Limited
Date: 02/11/2006 11:00:08 AM Produced by the JSE SENS Department
