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African Bank restructure delayed

Information Memorandum not yet complete.
African Bank curator, Tom Winterboer.

JOHANNESBURG – The creation of African Bank Good Bank, targeted for October 2015, will likely be delayed, according to a stock exchange filing issued on Wednesday.

This is as a result of a delay in issuing an Information Memorandum (IM), expected this month, which will provide further detail of the Good Bank restructuring, including anticipated offers to creditors and other parties.

“A number of issues remain to be concluded. These include the proposed acquisition of The Standard General Insurance Company Limited (Stangen), which is still under negotiation and further announcements in this regard are expected in due course,” African Bank said.

“The Curator will provide an update to the market on timing of publication of the Information Memorandum as further clarity in respect of the above matters emerges,” it said.

No expected date for the release of the IM or the completion of the restructure was provided.

Affected parties will be given an opportunity to comment on the IM once published, before consent is sought from the Minister of Finance for the restructure.

Curator, Tom Winterboer – who was appointed by the South African Reserve Bank (Sarb) in August last year after the unsecured lender collapsed under a sea of bad debts and was placed into curatorship – has already published details of what various debt and equity holders will get out in the event of a restructure.

While debt holders seem to have made peace with what they’ll be getting out, the restructure remains dependent on the gazetting of the Banks Amendment Bill, which essentially lends it legitimacy in the eyes of the law.

The Bill, which gives the curator of a failed lender wide-ranging powers to restructure such an entity, has been passed by the National Assembly and was signed off by the President at the end of June. 

Last month, African Bank reported a R9.3 billion loss for the 12 months to September 2014 – a 58% increase on the 2013 financial year.

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