Capitec clears the first Mercantile buyout hurdle
plans to speed through a US Chapter 11 bankruptcy within 45 to 60 days along with the court filing in Wilmington, Delaware.
The process included the shaving off of some of its more than $3.2bn debt, and using bankruptcy law power to break unattractive leases.
Mattress Firm also issued shareholdings to lenders in order to stay in business in a reconfigured business.
On Monday, Steinhoff appointed Louis du Preez as permanent chief executive to reignite its fortunes.
Du Preez and van Merwe were instrumental in steering Steinhoff and leading the restructuring of nearly $11bn in debt.
The appointment sent the stock rallying 16 percent, backed by the granting of the bankruptcy application to Mattress Firm.
Steinhoff shares rose 2.20 percent on the JSE yesterday to close at R1.86. CAPITEC Bank Holdings has cleared the first hurdle in its attempt to acquire the entire stake in Mercantile Bank for R3.2 billion, with the Portuguese Council of Ministers announcing its approval of the sale by Caixa Geral de Depósitos (CGD). CGD owns 100 percent of Mercantile Bank and is selling the bank as part of a strategic recapitalisation plan approved by the European Commission and requiring CGD to reduce its foreign assets.
Capitec first made its intention known to acquire Mercantile and its subsidiaries in June through its wholly owned subsidiary, Capitec Bank. However, the transaction is subject to regulatory authority.
Capitec said shareholders would be informed once all regulatory approvals had been received and the transaction is final. Nedbank and the Public Investment Corporation (PIC) are other institutions believed to have shown interest in acquiring Mercantile Bank.
“The board is pleased to advise shareholders that Capitec Bank’s offer of R3.2bn, to be adjusted by any change in the net asset value of Mercantile from April 30, 2018, to the completion date of the transaction, when all conditions precedent have been met, has been accepted. The purchase consideration will be paid from capital and cash reserves,” Capitec said yesterday.
Capitec Bank said it believed that there were many opportunities in the market to serve small-to-medium enterprises and owner-managed businesses better and the bank had commenced with a strategy to develop infrastructure to facilitate same.
“The acquisition of Mercantile will obviate the need to reinvent and create new systems and processes from scratch and thus fast track the bank’s objective to expand its focus to a broader bank strategy,” Capitec said. Mercantile’s core business is business banking for small to medium-sized enterprises and entrepreneurs and it is therefore well positioned to align with Capitec Bank’s business banking strategy.
Capitec’s share price closed 0.86 percent lower at R1 090 on the JSE yesterday.