This is expected to be done through the issue of new ordinary shares by ETI.
“In 2011, Nedbank Limited, a member of the Nedbank Group, provided ETI a 285 million US dollar facility in support of Ecobank’s corporate development programmes, including its acquisition of Oceanic Bank in Nigeria,” Nedbank said.
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“The arrangement, announced on 1 December 2011, provided Nedbank Group with subscription rights which it could elect to exercise between 24 and 36 months to become a 20 per cent shareholder in ETI. Nedbank Group has exercised its rights to subscribe for a shareholding in ETI.”
According to the South Africa-based banking group, as a shareholder, it will be afforded the right to representation on the ETI board and has nominated its chief operating officer, Graham Dempster, to join the ETI board.
As a result of this, ETI will exercise its reciprocal right to an appointment on the [DATA NED:Nedbank Group] board, however, both board appointments are subject to regulatory approvals.
“Nedbank Group will subscribe for 4 512 618 890 new ETI shares to be issued for a cash consideration of 493.4 million US dollars. The investment in ETI will be at an effective price of 10.93 US cents per share,” it said.
“This transaction is expected to result in an approximate 80 basis points pro forma reduction in Nedbank Group’s common equity tier 1 ratio under Basel 3, which was 12.1 per cent at 30 June 2014.”
The group added that post the transaction, it will remain strongly capitalised and its common equity tier 1 ratio will be well within its published internal target range of 10.5 per cent to 12.5 per cent.
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Nedbank Group is one of South Africa’s four largest banking groups by assets and deposits. Old Mutual plc is our majority shareholder in the group, owning 52 per cent of it.