Poll

I will Buy African Bank Shares @

Below R8
0 (0%)
Below R7
2 (8.3%)
Below R6
13 (54.2%)
Are you Mad !!
4 (16.7%)
Never
5 (20.8%)

Total Members Voted: 23

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Author Topic: African Bank  (Read 45177 times)

Moneypenny

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Re: African Bank
« Reply #60 on: August 13, 2014, 11:41:59 am »
Ek verstaan nie die Afrikaanse besigheidswoorde so lekker nie. Is uitgif 'n share?
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jaDEB

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Re: African Bank
« Reply #61 on: August 13, 2014, 12:19:54 pm »
Uitgif is "Rights"
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jaDEB

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Alsie

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Re: African Bank
« Reply #62 on: August 13, 2014, 12:25:13 pm »
As I understand it - and I don't know if I am right - Abil as we know it is gone forever.  It will be replaced by a new "good bank" taking over the Abil business worth anything, and a "bad bank" taking over the mess. The only value that Abil shares have is that it will afford shareholders a right to buy shares in the new "good bank" entity, when the new entity issue its shares (uitgifte van nuwe entiteit). The value for shareholders thus will be a function of the worth of the "good" business in the new "good bank". The share issue of the new "good bank" has been underwritten by the R10 billion from the other banks.  This in my opinion means that if you do not invest further monies (by exercising the rights and buy shares in "good bank"), the chance of recovering any value from your current shareholding will be virtually nil.
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jaDEB

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Re: African Bank
« Reply #63 on: August 13, 2014, 01:06:50 pm »
Yes, I also read it like you have it. Except maybe the rights might have a value, i.e you can sell your rights to buy shares in the new bank.
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jaDEB

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jaDEB

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Re: African Bank
« Reply #64 on: August 14, 2014, 11:51:55 am »
Junior bondholders will see their investment converted into equity.  More dilution of new listing
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jaDEB

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Patrick

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Re: African Bank
« Reply #65 on: August 14, 2014, 02:09:35 pm »
Maybe the R3k would have been better at a casino  8)
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jaDEB

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Re: African Bank
« Reply #66 on: August 14, 2014, 02:44:20 pm »
Thanks Patrick.  :wall: Will do so. 
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jaDEB

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attuu

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Re: African Bank
« Reply #67 on: August 15, 2014, 03:31:50 pm »
Abil suspended shares were removed from JSE today.
Does it mean shareholders finally say goodbye to their investments?
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Moonraker

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Re: African Bank
« Reply #68 on: August 16, 2014, 03:39:22 pm »
Link courtesy 'The darkside'

African Bank: How I LOVE me a bailout.

Why This Is Great News For Shareholders

The artist formerly known as African Bank will now be three entities:
A Good Bank (with the good performing loans)
A Bad Bank (with the bad loans)
An Old Bank (with whatever is left of African Bank, including the interest in Ellerines) – at least, so I gather.

Extract, but read all..

As I read it, here are all the ways that the new shareholders will benefit:
They can take up the rights offer in the Good Bank, which is ring-fenced from the bad loans (now in the Bad Bank) and Ellerines (in the Old Bank). So their money will be pretty safe. And they’ll get the upside when the Good Bank eventually re-lists.
That upside could be significant – because all the stuff that was concerning about the Old Bank (Ellerines, the business model, the non-performing loans) will now be a problem of the past. The Good Bank is going to be all about performing loans and so forth.
As for the bad loans – there’s a guaranteed R7 billion for anyone that takes up shares in the Good Bank (I think that’s where the R7 billion will go). And if there is better collection (including interest rates), then that will be passed along. So there’s upside there.
The bondholders are taking some of the hit (specifically, 10% of their face value) – so there’s a win.
And once the Old Bank is wound up, there will possibly be some residual payout. After all, Ellerines needs to be sold off. And the New Bank will buy the insurance units. But who knows – perhaps there really won’t be anything left.

In summary, if you managed to buy shares on Thursday and Friday, then you’re probably in for a little windfall. If you take up the rights offer, then you’ll have:
Shares in a good bank, with none of the really bad risks (and your share purchase was really just paying for the right to participate in the rights offer).
Possibly a bonus payout from the bad bank.
And even if you don’t do the rights offer, hopefully a little payout from the old bank.

It’s good news. Especially if you’re a new shareholder.

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Alsie

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Re: African Bank
« Reply #69 on: August 17, 2014, 12:11:18 pm »
Interesting – but unfortunately I am not so optimistic about this as you.  It is impossible to say the new shareholders will benefit.
May benefit? perhaps. Could lose more? probably.

No investor bought ABIL shares on Friday – only speculayers did. 
Some you win, some you lose – also in this case.

Value cannot be created out of nothing, which means that after the split the value of good + bad + old will be the same as what the total value of ABIL is now.  The value of the right to buy shares in new good bank must therefor be calculated as the value of the new good bank plus the negative value of the new bad bank, plus the negative value of the bankrupt old bank. 

Holders of shares in ABIL can:
1   sell their rights to buy shares in new good bank – and the value of those rights will still be determined,  but will most    definitely take into account the negative values of the others - there is no free lunch; or
2   will have to invest more money so as to buy the shares in new good bank.

It is true that the “value” of the rights might be more that the final 30c per share, but it could also be less.
The only chance that shareholders have of not loosing more than they already have, is if the market over reacted on Friday and the value is in fact more than the 30c closing price.  Speculators who bought in at these values obviously are in the same position.

My definition of good news is slightly different.

Let’s see what happens to the ABSA shareprice on Monday when their clients en masse withdraw their funds from the money market account where they had to take a write off due to this debacle.
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Moonraker

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Re: African Bank
« Reply #70 on: August 17, 2014, 12:22:00 pm »
Hell no, I am certainly not optimistic, never had the stuff and just posted the link. The only ameliorating scenario would be (as you hint), a very low i.e. attractive rights offer where the upside potential outweighs the downside. They will need to revisit their business model though.
BTW. Capitec was downgraded by Moody's - not justified.
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gcr

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Re: African Bank
« Reply #71 on: August 17, 2014, 02:16:43 pm »
This whole fiasco with African Bank can only be seen as diabolical.
What is going to be moved into the "good bank" - African Bank did not run a retail banking operation so they have little or no deposits from the general public. The lending policy of the bank was doomed from inception, however they followed the noise made by government to lend to the mass market, their failing - they got no protection guarantees from government to cover them for this eventuality
If there was any upside I doubt whether Coronation would have dumped almost 70% of their holdings on Thursday and Friday. I can't recall in my 40 years in banking of any bank that has been put into curatorship or even more recently business rescue that has come out of the wringer frsh and clean and ready to go banking again.
The biggest unknown is who was buying up the dumped Coronation shares and other fund managers who were getting themselves out of the pickle at any cost. I also think the PIC are up the creek as they did not seem to reduce their holdings.
There are constantly noises by political parties that banks should be nationalised here is an ideal opportunity for the PIC to buy the bank and then try and run it and get it out of its dilemma - but they won't goes this route because they can see any SIU is poorly managed and merely consumes tax payer monies   
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Moonraker

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Re: African Bank
« Reply #72 on: August 17, 2014, 03:19:41 pm »
'F*** the poor!' is the message from a top executive at African Bank

Quote
In a terrifying glimpse this week into the dark heart of unsecured lending in South Africa, a former top executive of African Bank, Tami Sokutu, scorned the poor who were sucked into debt by easy loans from his now failed company.


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gcr

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Re: African Bank
« Reply #73 on: August 17, 2014, 07:01:02 pm »
At least he is honest about it - the aNC have been doing this since 1994 but just haven't been bold enough to say it as it is :LHST:
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Not everything that counts, can be counted, and, not everything that can be counted counts - Albert Einstein

Moonraker

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Re: African Bank
« Reply #74 on: August 18, 2014, 08:39:54 am »
Would Abil pref shares be treated differently to ords ?
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