African Bank public offering still on course
SOUTH Africa’s failed African Bank Investments remains on course for an initial public offering early next year, its administrator said, following an August collapse that inflicted losses on all its investors.
Senior debt holders, with R19.4 billion of African Bank’s bonds, face a loss of 10 cents in every rand and joined forces in a group that met with the lender in the past week to seek better terms.
Separately, investor Frank Cadiz, co-head of Cadiz Asset Management, is trying to buy the bank’s preference shares in his own capacity so that he would benefit ahead of ordinary holders in an IPO.
“All creditors will want a better deal, but there are no changes,” Tom Winterboer, African Bank’s administrator, said in Joburg yesterday.
“At the moment, we’re still working on a 10 percent haircut. There is nothing that indicates that the South African Reserve Bank’s rescue plan shouldn’t be realised.”
The central bank stepped in on August 10 with a plan to salvage Abil’s viable assets and arrange an IPO, while saying shareholders and subordinated debt holders may lose all their money.
In the eight months or more it may take Abil to arrange an IPO, the bank has to keep on lending and collecting money to stave off any deterioration in the value of its assets.
“We’re not seeing a deterioration in the book, and disbursements are picking up – they’re slightly better than expected,” Winterboer said.
“We’ll get the new bank licence probably only in early 2015. The bank is quite stable.” he added. – Bloomberg