ADC takes over majority of BancABC ++ Suspension of share buyback program
Dissemination of an Ad hoc announcement according to § 15 WpHG
ADC African Development Corporation GmbH & Co. KGaA ('ADC'), ISIN DE000A1E8NW9, a fast growing pan-African banking group focused on the frontier markets of sub-Saharan Africa, is pleased to announce that it has now become the majority shareholder in ABC Holdings Limited ('BancABC') with a shareholding of 50.4% as a result of the underwriting of BancABC's recently finished rights offer. ADC has subscribed to 82 million new shares at USD 0.60 per share, therefore investing an additional USD 49 million (EUR 39 million).
As a result of the significant change in ADC's shareholding in BancABC, ADC will consolidate BancABC in its financial statements latest at year-end. Consequently, ADC's current balance sheet will significantly change and be transformed into the balance sheet of an operational banking group. BancABC is a regional banking group with 50 branches and 1,000 employees in five Southern African Development Community (SADC) countries (Botswana, Zimbabwe, Zambia, Tanzania and Mozambique).
With this purchase and the recent acquisition of a strategic stake in Union Bank Nigeria ('UBN'), as well as together with the other existing ADC operations in Equatorial Guinea (Banco Nacional de Guinea Ecuatorial), Kenya (Resolution Health), Rwanda (RSwitch) and South Africa (iVeri), ADC has reached significant milestones towards its defined goal of becoming one of Africa's leading pan-African banking groups. The management is confident that this will be rewarded by the shareholders and therefore is suspending the share buyback program which was initiated on 20 February 2012, for the time being with immediate effect. The company will notify about the resumption of the share buyback accordingly.
Under the share buyback program to date 311,988 own shares were purchased which represents a share of 3.62% of the share capital. A total of EUR 2,733,275.32 was invested in own shares at an average purchase price of EUR 8.80.
+++ End of the Ad hoc release +++
BancABC has successfully raised USD 50 million through a rights issue. ADC already held a 25.9% stake in the banking group prior to the rights issue. The investment was successively increased since March 2011 and ADC has now achieved a majority shareholding of 50.4% in the regional banking group. ADC increased its stake in BancABC in a full alignment of interests with the BancABC management team. The total invested amount in BancABC is USD 67 million (EUR 53 million). ADC intends to consolidate BancABC with consolidated financial statements presented latest at year-end. Therefore, all BancABC core numbers will be reflected in ADC's balance sheet.
With a balance sheet of USD 1.2 billion at year-end 2011 (53% growth since 2010), 50 branches and 1,000 employees in five Southern African Development Community (SADC) countries (Botswana, Zimbabwe, Zambia, Tanzania and Mozambique), BancABC has shown significant growth in the past years. For the past two years, the bank is successfully expanding into the retail segment, which gives access to cheap deposits (at year-end 2011 almost USD 990 million, a 50% growth since 2010), supporting the lending business with a loan book size of USD 812 million at year-end 2011 (97% growth since 2010). Following the capital raise, all banking subsidiaries of BancABC will either be in the top tier or upper second tier of banks in the respective countries that the group operates in.
As publicly listed on the Botswana and Zimbabwe stock exchange, BancABC reports half year figures, and ADC will notify its shareholders accordingly in the future about any major news released by BancABC. The same applies for Union Bank Nigeria. You can also find more information here: www.bancabc.com and here: www.unionbankng.com.
In the coming months, ADC and BancABC will work hand in hand to grow the business of BancABC significantly and to both expand its operations in the existing countries and to create opportunities for an expansion in further markets. BancABC and Union Bank Nigeria will also start exchanging knowledge und know how. Douglas Munatsi, CEO of BancABC, has consequently been nominated for the Supervisory Board of Union Bank Nigeria as an ADC representative.
Douglas Munatsi, CEO of BancABC, commented on the rights issue: 'This is a historic occasion for the BancABC group and positions us well for the future. The funds will be utilized for the capitalization of our banking subsidiaries which have registered phenomenal growth in the last couple of years. After the successful equity increase we intend to raise an additional USD 75 million to USD 100 million by way of Tier 2 capital, to further bolster the operations and even more boost growth and earnings.'
Dirk Harbecke, CEO of ADC, commented: 'BancABC will now become one of our key banking operations in sub-Saharan Africa, particularly Southern and East Africa. We expect the bank to grow its balance sheet by more than 30% per year over the next years. We are excited that we have been able to conclude this transaction at a very attractive valuation. Most importantly, we look forward to further intensifying the cooperation with the BancABC management team which has our full confidence and already contributes significantly to the success of ADC.'
On ADC's strategy, Dirk Harbecke commented: 'Africa offers a once in a lifetime investment opportunity, and ADC is one of the strategically best positioned financial services platforms already present and active in 11 countries in sub-Saharan Africa. We are very confident to be able to build a leading pan-African banking group within the next 3-5 years. Furthermore, we believe that our banking strategy in sub-Saharan Africa opens up numerous interesting follow-up investment and business opportunities in sectors like natural resources, construction, energy etc. that we would like to share with our shareholders and advisory business clients. It is our target to grow ADC's consolidated group net profit before minorities to at least EUR 50 million within the next 3-5 years.'
BancABC is the banking brand name of ABC Holdings Limited, a company registered in Botswana, which has a primary listing on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange. BancABC is a regional bank with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe and has a group services office located in Johannesburg, South Africa. Historically, BancABC was a merchant bank offering a diverse range of services. These included wealth management, corporate banking, treasury services, leasing, asset management and stock broking. BancABC recently
expanded into the retail space. BancABC's vision is to become Africa's preferred banking partner by offering world-class financial solutions. For information, visit www.bancabc.com
ADC African Development Corporation ('ADC') (ISIN: DE000A1E8NW9; Bloomberg: AZC.GR, www.african-development.com), a member of the Angermayer, Brumm & Lange Group (www.abl-group.de), was established in September 2007 and is on its way to become one of the leading banking groups in sub-Saharan Africa, active in corporate and retail banking and proprietary investments. The company's success is primarily due to its local management team, which follows international best practice principles to further develop its operational companies, and implements international best practice processes to increase their profitability. ADC was amongst the first international emerging market investors to be integrated into the insurance solution offered by the Multilateral Investment Guarantee Agency ('MIGA'), a member of the World Bank Group, primarily due to its strong operational approach and adherence to the highest ethical standards. This insurance offers protection against a variety of political risks, in particular the risk of radical political change.
ADC African Development Corporation
Telefon: +49 69 719 12 80 119
Telefax: +49 69 719 12 80-089
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