This, as it aims to provide ABIL and African Bank stakeholders with an operational update on progress towards the restructuring of African Bank.
(READ MORE: Curatorship the start to saving African Bank)
“The curatorship team has been continuing to work to ensure the stability of the core operations of the bank, specifically in relation to loan disbursements, loan collections and ongoing lending strategies to maintain the market position of African Bank during the current transition phase,” it said.
“This has included the introduction of new credit and lending policies, the development of new business strategies and a review of operating costs. Since the curatorship, the lending risk criteria of African Bank have been tightened.”
WHAT DOES THE RESTRUCTURING PLAN ENTAIL?
According to the company, the tightening has taken into account the current circumstances of the bank and economic situation in South Africa, and aims to be consistent with the envisaged business model of the good bank.
“The restructuring proposal contained in the South African Reserve Bank (SARB) statement, together with the commentary provided in the September SENS announcement, remains the basis of the restructuring proposal being implemented by the curator,” ABIL said.
“Good bank will be a newly 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.”
[DATA ABL:ABIL] further stated that an application for a new banking licence for the good bank was submitted to the SARB on 28 October 2014.
“In addition, good progress is being made in selecting and appointing the new board of directors and chief executive officer of good bank and the holding company,” it added.
“It remains the restructuring proposal that the core lending assets of African Bank, referred to in the SARB statement as having a net book value of approximately 26 billion rand net of portfolio impairments, will be transferred to good bank.”
The curator had previously intended to conclude the restructuring exercise during the first quarter of calendar 2015. However, it seems that the process is set to take slightly longer.
“This timetable envisaged good bank receiving the appropriate regulatory approvals to commence business on an accelerated basis compared to what would ordinarily be the case for a bank start up,” ABIL stated.
“Whilst there has been significant progress made to date, the need to receive the regulatory approvals prior to the transfer of assets to good bank means that it is more likely that the restructuring of African Bank will be completed after the first quarter of 2015.”
AN UPDATE ON ELLERINE FURNISHERS
ABIL released a separate announcement on the status of the business rescue process for Ellerine Holdings Limited and Ellerine Furnishers (EF) and an update on its annual results.
“The business rescue plan for EF was approved by creditors of that company, voting 99 per cent in favour of the plan. The practitioners have only received offers to purchase the Beares and Dial-a-Bed divisions of EF, which are subject to regulatory approval,” the company said.
“The practitioners also received an indicative offer for EF’s shares held in Ellerine Services Proprietary Limited which holds EF’s interests through various subsidiaries in the rest of Africa, i.e. excluding South Africa.”
(READ MORE: African Bank’s Ellerines applies for business rescue)
In light of this, Ellerine Holdings Limited is expected to publish its business rescue plan during the first quarter of 2015, having obtained the creditors approval for such extension.
ABIL added that it expects to publish the annual financial results and the audited financial statements for the financial year ending 30 September 2014 sometime during the first quarter of calendar 2015.