The South African Reserve Bank (SARB) has published a request for proposals (RFP) to appoint a transaction adviser relating to the future sale of its shareholding in JSE-listed African Bank.
SARB acquired a 50% shareholding in African Bank in 2016, as part of African Bank’s restructuring, after it was placed under curatorship.
SARB in July last year said it would sell its stake in African Bank in a year or two.
The bank was placed under SARB’s control after nearly collapsing in 2014, owing to the weight of bad loans. The bank was hived off from African Bank Investments when its listed parent began to fail.
As part of the curatorship process, SARB, the Public Investment Corporation and a number of private banks took up a stake and recapitalised the “good” bank, while the worst of its loans were hived off into an entity that is now known as Residual Debt Services.
“It was not the intention of SARB to own the shares for a very long time, but we did want to ensure that the bank was sound and stable before we exit,” SARB deputy governor Kuben Naidoo said at the time.
He explained that the shareholding created a potential conflict of interest between its role as the regulator of African Bank and as a major shareholder.
In its role as shareholder, SARB provided a capital injection to assist in financing the bank’s operations.
Since the new African Bank began operations in April 2016, it had made good progress towards achieving its strategic objectives, while increasing profits and building a stronger balance sheet.
SARB believes this is an opportune time for African Bank to obtain a long-term sustainable shareholder that is better aligned to the bank’s growth aspirations.
The transaction adviser will assist the SARB in determining the scope and approach for the disposal.
The SARB expects the disposal process to be completed within 18 to 24 months after the identification of a suitable buyer.Creamer Media Senior Deputy Editor Online