ABIL to transfer core lending assets to the “Good Bank” - CNBC Africa

ABIL to transfer core lending assets to the “Good Bank”

Financial

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ABIL comprises of African Bank and Ellerine Holdings. PHOTO: Tygervalley.co.za

This is according to a SENS announcement stating that all senior unsecured debt holders of [DATA ABL:African Bank Investments Limited] (ABIL) will be offered amended terms and transferred to the Good Bank that will be established using 10 billion rand of capital raised by a consortium of six South African banks that hold government employee pension funds.

“The Good Bank will be a new registered bank and a wholly owned subsidiary of a newly established holding company which is intended to be listed on the Johannesburg Stock Exchange (JSE) in due course,” said ABIL in a statement.

(READ MORE: S.Africa's central bank to investigate failed lender ABIL)

ABIL will continue to issue and collect loans, however with a lower appetite for credit risk.

All payments of interest and capital on debt will remain suspended with the exception of retail deposits and trade creditors.

Unsecured debt holder capital maturities will be extended by up to 24 months.

Subordinated debt, considered a higher risk than senior debt, will not receive the 10 per cent haircut of face value that senior debt holders will receive in the amended terms. 

(READ MORE: SARB to introduce support measures for ABIL) 

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