African Development Corporation initiates BancABC takeover offer

Published: 10 June 2013

African Development Corporation announced that the management and the Supervisory Board resolved to engage in pooling agreements with aligned investors in ABC Holdings Limited, Botswana (BancABC) and additionally to submit a mandatory takeover offer to the minority shareholders of BancABC. Additionally it was resolved to take the next steps to transform ADC into a stock corporation (AG) by applying as an AG for listing in the Entry Standard of the Frankfurt Stock Exchange, Financial Express reported.

ADC's subsidiary, BancABC, has announced the allotment of 24,080,230 ordinary shares to the International Finance Corporation (IFC), a member of the World Bank Group, upon the conversion of a convertible loan of BWP 78.0 million (EUR 7.0 million).

ADC has engaged in pooling agreements with two aligned minority investors of BancABC for a further 7,741,562 shares in the banking group. The underlying shares in the pooling agreements were purchased at a price below USD 0.60 per share. Through these two pooling agreements, ADC is guaranteed to maintain control of BancABC with 50.1% majority post conversion by the IFC.

In addition, ADC will undertake a mandatory takeover offer to minority shareholders of BancABC and offer a cash payment equal to the price at which ADC acquired a majority shareholding while acting as an underwriter of the bank's rights issue in July 2012. The mandatory takeover offer will be executed at a price of USD 0.60 per share on the Zimbabwe Stock Exchange and at the exchange rate equivalent of BWP 5.05 on the Botswana Stock Exchange.

The takeover offer will be made in accordance with the terms specified in the offer document, which will be made available online at www.african-development.com in due course. The financing for the uptake of the mandatory takeover offer has been secured from co-investors.

The next step in the transformation of ADC into a stock corporation (AG) will be to submit an application for listing the new corporation in the Entry Standard segment of the Frankfurt Stock Exchange in due course.

Dirk Harbecke, CE of ADC commented: "ADC's vision is to strengthen its existing banking operations, expand into further attractive banking markets and to establish a pan-African banking group over the next 2–3 years. The strengthened equity position and shareholder base of BancABC is an important step to secure further access to funding. By engaging in pooling agreements and executing the takeover offer, we aim to firm-up our control in BancABC and to realize our vision together with the strong BancABC Management team."

Alastair Newton, Chairman of ADC commented: "Irrespective of the outcome of the mandatory offer, this week's first ever joint Board meeting was an important step forward in the consolidation of ADC and BancABC as we launch our ambitious drive towards the creation of a pan-African banking group."

ADC's Extraordinary General Meeting resolved the transformation of the company into a stock corporation (AG) in January 2013 to reflect the strategic enhancements in the corporate structure. ADC has spent the last months preparing the legal documentation as well as the 2012 Annual Report that will be released at the beginning of June with the first time consolidation of BancABC. In order to complete the registration of the AG in the commercial register, the company is required to renew its listing on the stock exchange.

Dirk Harbecke commented further: "In order to remain a fast moving player during our envisioned expansion in the sub-Saharan African banking market over the next years, we have decided to apply for a re-listing in the Entry Standard to increase operational flexibility and reduce costs. I would like to assure all current and future shareholders that the shares will remain tradable at all times and reporting standards will remain high."

The company expects to list the AG in the Entry Standard in the second half-year of 2013. Shareholders will be informed about both the result of the takeover offer and once the listing becomes effective.
- financial express