Funders of ‘old’ African Bank to get paid R600m
Funders in the ‘old’ African Bank, which was placed under curatorship in 2014, now known as Residual Debt Service (RDS), are set to receive an extra-ordinary payment of R600 million on April 24.
This will bring the total paid out to holders of the subordinate stub instrument RDS to R8.45 billion.
African Bank Group CEO Kennedy Bungane said: “We are delighted that we have been able to reach this point where the indemnity has expired, allowing a further payment to be made to subordinate stub holders of RDS.”
The indemnity provided to the new African Bank of R500m expired on April 4 and there were no claims under such, it explained yesterday, saying that R500m was therefore now available for distribution to holders of the subordinate stub instrument.
This as the curator, Craig du Plessis, had reduced the operating float from R300m to R200m, resulting in a further R100m available for distribution. Therefore, a total distribution of R600m would be made to the subordinated stub holders.
African Bank was placed under curatorship in August 2014. Two years later, a new entity was created. As part of the successful restructuring and resolution, the majority of the debt was transferred to the new African Bank, leaving behind material liabilities in RDS. These residual stub instruments entitle payments from RDS to both senior and subordinate stub holders, in accordance with a distribution waterfall.
Du Plessis said: “We are pleased to be in a position to make a further payment to the subordinate stub holders. The ongoing collaboration between RDS and African Bank, since the restructuring was concluded in April 2016, is commendable.
“The book continues to be managed well and with strong collections, it has resulted in another milestone achievement that has further benefited stub instrument holders and the new African Bank.”
Du Plessis intends to continue to make six-monthly distributions of the surplus funds collected to the holders of the subordinated stub instruments, in accordance with the terms of such instruments.
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