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Johannesburg - African Bank Investments, the unsecured lender that collapsed last year, said its viable assets will begin trading as part of a new banking entity in February, delaying its start from an initial October deadline.
The lender on Wednesday also released an information memorandum, giving details on changes to the lender brought about by its rescue by the South African Reserve Bank (Sarb). Comments can be made on the memorandum until October 9 and a final document is planned for October 26, after which Minister of Finance Nhlanhla Nene will have to approve the plan by December 8, the Johannesburg-based bank said in a statement.
To rescue the lender and create a so-called good bank from its viable assets, administrator Tom Winterboer and his team have had to get banking laws changed, appoint new directors, fire some staff, negotiate with investors, produce financial results and arrange a sale of the lender’s Standard General Insurance Company to a group of banks.
When African Bank first failed in August 2014, senior bondholders faced a 10% loss while all other investors stood to lose everything. After negotiations, the lender agreed in May that subordinated debt holders may recoup 37.5% of their investments.
An investigation into whether fraud or reckless lending was responsible for the collapse of African Bank will be published by the Sarb by year-end.
