African Bank Receives Offer for Suspended Preference Shares

Nov. 27 (Bloomberg) — African Bank Investments Ltd., the South African lender that collapsed in August, said it received an unsolicited offer from Deep Value Investments (Pty) Ltd. for its preference shares.

African Bank had 13.5 million preference shares that traded on Johannesburg’s stock exchange until all securities were suspended on Aug. 11. The South African Reserve Bank, which stepped in with a rescue plan for the bank on Aug. 10, said the holders of preference shares may lose their capital. It arranged for six lenders and the Public Investment Corp. to raise 10 billion rand ($914 million) to recapitalize Abil’s viable assets.

“This offer does not in any way relate to the resolution plan referred to in the press release, related to African Bank Ltd., issued by SARB on August 10,” Johannesburg-based Abil said in a statement today. “The board of Abil would like to confirm that the entity making the offer is in no way authorized by or instructed to act on behalf of Abil.”

The African Bank administrator is planning an initial public offering for part of Abil next year, potentially allowing investors to recoup some losses. Tom Winterboer, appointed as administrator by the central bank, did not immediately respond to a message left on his mobile phone.

Whoever Deep Value Investors are “it may be that they believe the preference shares will have a recovery that is more than what they are offering or it could be they see the debt negotiations being complicated,” Jean Pierre Verster, an analyst at Johannesburg-based 36ONE Asset Management, said by phone today. “If they have some kind of other interest in Abil, such as equity, they want to hold the preference shares to make sure they have more bargaining power and can sway a more favorable outcome.”

To contact the reporters on this story: Renee Bonorchis in Johannesburg at [e-mail]; Janice Kew in Johannesburg at [e-mail] To contact the editors responsible for this story: Dale Crofts at [e-mail] John Viljoen