Final Update on African Bank Investments Limited (“ABIL”)

Dear investors

It has now been 30 months since the demise of African Bank in August 2014 and we thought it prudent to provide, what ought to be, a final update.

On the 1st February 2017, trading suspensions on the African Bank Investments Ltd (“ABIL”) ordinary and preference shares were lifted. This was the final step in a long process that involved (amongst others) suspended trading conditions, African Bank being placed under curatorship and emerging as a new independent entity, the holding company ABIL being in-and-out of business rescue, a new board being approved and finally the renaming of the holding company from African Bank Investments Ltd to African Phoenix Investments Ltd.

African Bank Investment Limited (“ABIL”) Ordinary and Preference Shares
On the 1st February 2017, ABIL’s ordinary and preference shares resumed trading on the JSE under the new company name African Phoenix Investments Ltd.

  • The ordinary share code “ABL” now trades under the JSE code “AXL”
  • The preference share code “ABLP” now trades under the JSE code “AXLP”

We have subsequently sold out of our small ordinary share (“AXL”) position, and have taken some profits and reduced our holdings post the re-rating of the preference shares (“AXLPs”).

African Bank (“ABL”) Debt Instruments
As per our previous communications, the new African Bank (“Good Bank”) was launched on 4th April 2016. Part of establishing the new Good Bank entailed the conversion of all the previous ABIL debt instruments into new listed debt investments in the Good Bank, along with a proportionate cash payment. The new debt instruments began trading during the first week in April 2016 and we sold a portion of our holdings in the market.

We transferred all the cash subsequently, as well as all the remaining debt instruments from the four Element ABIL Retention Funds, back into the main Element Unit Trust Funds in a two-step process that started in April 2016 and was concluded in July 2016.

The Element ABIL Retention Funds have been closed, and investors would have seen all their Retention Fund unit holdings converted into main Element Unit Trust Fund holdings in July 2016 already.

Conclusion
Investors might remember that shortly after African Bank was placed under curatorship, we stated that we believe that the loss of capital would not be permanent. To that point, our latest Quarterly Newsletter (4Q2016) goes into more detail to demonstrate that the full capital loss has been recovered fully – and that was prior to the African Bank Preference Shares being re-priced in the market from the suspended R7.80 (Element’s carrying value while the shares were suspended) to R33.50 (closing price as at 9 February 2017), an increase of 429%!

Please do not hesitate to contact us at 021-426 1313 or info@elementim.co.za should you have any further queries in this regard. All of the previous updates on ABIL are also available on our website, www.elementim.co.za, for your perusal.

Kind regards

Jeleze Hattigh
Portfolio manager

 
 

WE WERE THE FIRST SOUTH AFRICAN INVESTMENT MANAGER TO SIGN THE UNITED NATIONS PRINCIPLES FOR RESPONSIBLE INVESTMENT

WE ARE COMMITTED TO THE CODE FOR RESPONSIBLE INVESTING IN SOUTH AFRICA