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STANDARD BANK GROUP LIMITED - ABRIDGED PRE-LISTING STATEMENT
STANDARD BANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/017128/06)
Share code: SBPP ISIN: ZAE000056339
(`Standard Bank Group` or `the Company)
ABRIDGED PRE-LISTING STATEMENT
1. Introduction
Standard Bank Group wishes to raise cost effective permanent share capital
as part of a general capital management programme and to provide the Company
with funding for strategic initiatives.
More specifically, the proceeds of the offer to subscribe for non-redeemable,
non-cumulative, non-participating preference shares in Standard Bank Group with
a par value of R0,01 each (`preference shares`) at a minimum subscription amount
of R100 000 per single addressee acting as principal (`offer for subscription`)
and the private placement of 20 000 000 preference shares at a subscription
price of R100 per share (`private placement`), which will qualify as regulatory
primary capital, will enable the Company to:
return ordinary shareholders` equity by way of ordinary share repurchases
and/or special or increased dividends; and/or
facilitate possible black economic empowerment transactions to enable
Standard Bank Group`s attainment of the Financial Sector Charter direct
ownership points.
Prior to the issue of this Abridged Pre-Listing Statement, 20 000 000
preference shares were placed with selected institutional investors at a
subscription price of R100 per preference share. Irrevocable commitments have
been obtained from these institutions to subscribe for all 20 000 000 preference
shares, thereby raising R2 000 000 000.
2. Information relating to Standard Bank Group
2.1 Incorporation
Standard Bank Group (together with its subsidiaries referred to as `the
Group`) is the holding company of one of the leading banking and financial
services groups based in South Africa and was incorporated in South Africa in
1969. The Company was listed on the JSE Securities Exchange South Africa (`JSE`)
in 1970. Standard Bank Group changed its name from Standard Bank Investment
Corporation Limited with effect from 3 June 2002.
2.2 Background
The Group was established as The Standard Bank of British South Africa Limited
and incorporated in London in 1862. In 1962, The Standard Bank of South Africa
Limited (`Standard Bank`) was formed and registered as a South African company,
operating as a subsidiary of Standard Bank in London (which became Standard
Chartered Bank plc (`Standard Chartered`)). Standard Bank Group (then known as
Standard Bank Investment Corporation Limited) was established in 1969 as the
holding company of Standard Bank. Standard Chartered sold its 39% stake in
Standard Bank Group in 1987, transferring complete ownership of the holding
company to South African shareholders.
The re-establishment of Standard Bank`s African links began in 1988, when a
branch was set up in Swaziland. In 1992, the group set up operations in Botswana
and acquired a major African banking operation, the long-established ANZ
Grindlays network in Botswana, Kenya, Uganda, Zaire, Zambia and Zimbabwe and
minority holdings in Ghana and Nigeria. Standard Bank Group`s African
operations, Stanbic Africa Holdings Limited (`Stanbic Africa`), has one of the
biggest single networks of banking services in Africa.
The Group has also continued to expand internationally. Standard Bank London
Limited (`Standard Bank London`) was established in 1992 and, in the same
year, operations in Jersey and the Isle of Man were acquired. Three years
later, the Isle of Man bridgehead was broadened considerably with the
acquisition of Standard Chartered`s banking activities on the island.
Standard Bank Group also has a full branch in Taipei, offices in Hong Kong,
London and New York and trading operations in New York and Hong Kong.
Standard Bank Group completed the acquisition of Jardine Fleming Bank Limited in
July 2001.
2.3 Group structure
For a diagrammatic explanation of the structure under which Standard Bank
Group operates please refer to the press announcement published on
14 June 2004.
2.4 Nature of business
The Group has established itself as a leading provider of banking services
in South Africa, has one of the biggest single networks of banking services in
Africa and has continued to expand internationally. In addition to its banking
operations, the Group enjoys a strategic interest in the insurance industry
through control of Liberty Group Limited (`Liberty Group` together with its
subsidiaries referred to as `Liberty`), one of Africa`s leading life offices
and financial services groups. The Group`s major businesses or divisions are
described in more detail below.
Retail Banking
Retail Banking provides banking, investment, insurance and other financial
services to individual clients, the agricultural sector and small to medium-
sized enterprises throughout South Africa. In line with the `Simpler. Better.
Faster.` payoff line, Retail Banking has enabled the Standard Bank brand to
become more tangible and beneficial to its diverse client base.
Vehicle and Asset Finance
This division finances a wide range of new and used moveable assets, such as
passenger vehicles, leisure goods, commercial vehicles and capital equipment.
Specialised finance solutions offered include leasing and instalment sales. A
range of products is also available for fleet management.
Corporate and Investment Banking
Corporate Banking
The team of corporate banking specialists delivers a personalised and
comprehensive service to medium and large corporate and institutional clients.
Each client is managed by an account executive that ensures that clients
receive advice, holistic solutions and superior service on products ranging
from routine banking enquiries to complex financial transactions.
Correspondent Banking
The Correspondent Banking team provides payment, trade and other investment
banking solutions to banks and financial institutions on a global basis.
Supported by Standard Bank Group`s experience in commodities and emerging
markets, the team of resource banking specialists provides a comprehensive
range of risk management, financial and banking solutions to clients in the
resources sector.
Structured Debt Finance
Structured Debt Finance provides innovative solutions for all long-term
financing requirements. Working with other specialist divisions within
Standard Bank, the division provides creative and innovative solutions as well
as an understanding of the client`s business and industry.
Trade Finance
Dedicated industry sector specialists are able to provide clients with
customised solutions for a wide spectrum of trade and commodity finance
requirements. The division assists clients throughout the commodity and goods
supply chain. Although the division has a global coverage, the focus remains
on Africa, Latin America, the Middle East, Eastern Europe and Asia.
Project Finance
The team of project finance specialists provides advisory and arranging
services to companies and consortia for limited recourse projects and other
structured solutions. These include project evaluation and risk management
strategies, credit enhancement options, structuring and negotiated solutions.
Capital Investments Division
Capital Investments Division is the private equity arm of Standard Bank. The
division`s primary objective is to take proprietary equity positions that will
yield attractive returns over time. This division has the capability to
provide the full range of funding, including senior debt in co-operation with
Corporate Banking, mezzanine debt and equity.
International Trade Services
International Business Centres offer a variety of trade options, from
payment mechanisms to financing techniques, and also host a variety of trade
seminars on an ongoing basis.
Capital Markets and Treasury
Capital Markets: Services the long-term lending and borrowing requirements
of clients in the private and public sectors of the economy.
Domestic Money Markets: Services corporate and institutional funding and
investment requirements and trading in inter-bank and money market securities.
Equity derivatives: Standard Bank is one of the leading equity derivatives
houses in South Africa. Services offered include execution and
market making in exchange traded and over the counter index futures
and options, portfolio risk analysis, hedging programmes and structured equity
products, including asset swaps.
Fixed-income products: Standard Bank trades all fixed-income instruments,
such as spots, options, futures and repurchase agreements.
Precious and base metals: Standard Bank provides precious metal price risk
management and structured financial solutions to the South African mining
industry.
Foreign Exchange Trading: Standard Bank is the recognised leader in the
domestic foreign exchange market, handling more than 30% of South Africa`s
foreign exchange volume.
Corporate Finance
Corporate Finance provides strategic advice to South African and African
organisations within the context of mergers and acquisitions, stock exchange
listings, corporate restructuring, capital raising, privatisations, business
valuations, black economic empowerment and stock exchange sponsor services.
In addition, Standard Bank has recently formed the Acquisition Finance Group
which tailor-makes acquisition financing structures, incorporating a
combination of debt and equity financing, to finance a variety of transactions.
Financial Asset Services
Financial Asset Services is the leading provider of a comprehensive range of
custodial and investment related services in South Africa and sub-Saharan
Africa. Products and services offered include settlement and safekeeping
services for local equities, bonds and money market instruments, monitoring of
corporate actions, global custody services, securities lending, trustee services
and investment administration.
Business Online
Business Online offers business clients an integrated window to all the
online business services offered by Standard Bank Group. These services
currently range from traditional banking to trading in various financial markets
as well as electronic procurement and related online business services.
International
Standard Bank London is the headquarters of the international investment
banking activities of Standard Bank Group. Through an expanding international
network, the bank offers specialist banking services and promotes trade,
investment and business flows with an emerging market focus on a worldwide
basis.
Africa
The Group, recognising the strategic importance of trade and investment
between South Africa and the rest of Africa has, over the past few years,
substantially increased its presence on the African continent. It is
represented in 16 African countries, excluding South Africa, with over 100
points of representation.
STANLIB Limited (`STANLIB`)
STANLIB brings together the wealth, asset management and wealth product
marketing of two large financial service brands in South Africa - Standard
Bank and Liberty. STANLIB was officially launched in May 2002 and is owned by
Standard Bank Group, Liberty and a Black Economic Empowerment Consortium.
STANLIB serves both local and African markets and offers a product mix
featuring both local and global brands. It is a significant participant in the
South African financial services industry, with funds under management and
administration exceeding R152 billion.
Liberty
Liberty is a progressive financial services group that adopts a
sophisticated approach to providing financial solutions. Liberty boasts high
levels of security and good governance supporting its various obligations to
its investors. Superior investment performance in relation to the clients`
risk tolerance is of paramount importance to Liberty and all major asset
classes are managed to achieve this result. Liberty`s key strength remains its
high-quality, highly trained and growing agency, franchise and broker
marketing forces.
3. Directors of Standard Bank Group
The full names, ages, nationality (if not South African), qualifications and
addresses of the directors of Standard Bank Group have been set out below.
Full names Age Qualifications Address
Douglas Denoon
Balharrie Band* 60 BCom (Wits), CA (SA) 1st Floor
Equity House
18 Bompas Road
Dunkeld West
Elisabeth Bradley# 65 BSc (Free State), Wesco House
MSc (London) 10 Anerley Road
Parktown
Derek Edward Cooper# 64 CA (SA) 9th Floor
Standard Bank Centre
5 Simmonds Street
Johannesburg
Trevor Evans# 59 BSc (Rhodes), 114 Dennis Road
Executive Programme Atholl Gardens
(Marketing) (Cape Town) Sandton
Executive Programme
(Stanford)
Thulani Sikhulu
Gcabashe# 46 BA (Botswana and Eskom
Swaziland), Megawatt Park
Masters in Urban Maxwell Drive
and Regional Planning Sunninghill
(Ball State)
Derek Aubrey Hawton# 66 FCIS (Natal) 4th Floor
Sun International
27 Fredman Drive
Sandton
Sir Paul Judge
(British)# 55 MA (Cambridge), MBA 88 The Panoramic
(Pennsylvania) 152 Grosvenor Road
London
SW1V 3JL
United Kingdom
Sakumzi Justice
Macozoma* 47 BA (Unisa), BA (Honours) Ground Floor
(Boston) Executive Suite
17 Melrose Boulevard
Melrose Arch
Melrose
John Helenius Maree 48 BCom (Stellenbosch), 9th Floor
MA (Oxford), PMD Standard Bank Centre
(Harvard) 5 Simmonds Street
Johannesburg
Richard Peter Menell# 48 BA (Hons), MA (Cambridge), ARM House
MSc (Stanford) Block C
29 Impala Road
Chislehurston
Sandton
Kgomotso Ditsebe
Moroka# 49 BProc (University of 6th Floor
the North), LLB (Unisa) Innes Chambers
Pritchard Street
Johannesburg
Andrew Christoffel
Nissen# 45 BA Hons, MA Humanities 12th Floor
(Cape Town), Southern Life Centre
Diploma in Theology 8 Riebeeck Street
Cape Town
Robin Alan Plumbridge# 69 MA (Oxford), LLD (hc) Navarre Farm
(Rhodes) Somerset West
Myles John Denniss Ruck 49 BBus Sc (UCT), 3rd Floor
PMD (Harvard) Liberty Centre
1 Ameshoff Street
Braamfontein
Sir Robert Smith
(British)# 59 Chartered Accountant Inchmarnock
and Fellow of the 39 Palmerston Place
Institute of Bankers Edinburgh
in Scotland,
Honorary degrees
(Edinburgh, Glasgow,
Paisley)
Christian Lodewyk
Stals# 69 BCom, MCom, DCom 8 Glenvista Close
(Pretoria) Woodhill
Pretoria
Conrad Barend Strauss# 68 BA PhD (Rhodes), 9th Floor
MS (Cornell), AMP 5 Simmonds Street
(Harvard), FIBSA, DEcon Johannesburg
(hc) (Rhodes), DSc (hc)
(Pretoria)
* Non-Executive Director
# Independent non-executive Director
4. Share capital of Standard Bank Group
The authorised and issued share capital of Standard Bank Group, before and
after the private placement and the offer for subscription, assuming that all
the preference shares up to an aggregate value of R2 500 000 000 are allotted
and issued, is set out below.
Before the private placement and the offer for subscription
R million
Authorised share capital
1 750 000 000 ordinary shares of R0,10 each 175,00
8 000 000 6,5% first cumulative preference shares of R1,00 each 8,00
1 000 000 000 non-redeemable, non-cumulative, non-participating preference
shares of R0,01 each 10,00
Total authorised share capital 193,00
Issued share capital
1 345 515 867 ordinary shares of R0,10 each 134,55
8 000 000 6,5% first cumulative preference shares of R1,00 each 8,00
Total issued share capital 142,55
Share premium
On 1 345 515 867 ordinary shares of R0,10 each 2 411,00
Total share premium 2 411,00
After the private placement and the offer for subscription
R million
Authorised share capital
1 750 000 000 ordinary shares of R0,10 each 175,00
8 000 000 6,5% first cumulative preference shares of R1,00 each 8,00
1 000 000 000 non-redeemable, non-cumulative, non-participating
preference shares of R0,01 each 10,00
Total authorised share capital 193,00
Issued share capital
1 345 515 867 ordinary shares of R0,10 each 134,55
8 000 000 6,5% first cumulative preference shares of R1,00 each 8,00
25 000 000 non-redeemable, non-cumulative, non-participating preference
shares of R0,01 each 0,25
Total issued share capital 142,80
Share premium
On 1 345 515 867 ordinary shares of R0,10 each 2 411,00
On 25 000 000 non-redeemable, non-cumulative, non-participating preference
shares of R0,01 each 2 499,75
Total share premium 4 910,75
The Company`s authorised share capital was increased by R10 000 000 (ten
million Rand) by the creation of 1 000 000 000 (one billion) non-redeemable,
non-cumulative, non-participating preference shares of a nominal value of
R0,01 each by special resolution approved by the requisite number of
shareholders at the Annual General Meeting of Standard Bank Group held on
Thursday, 20 May 2004.
Also at the Annual General Meeting of Standard Bank Group held on 20 May 2004,
shareholders approved the ordinary resolution placing the preference shares
under the control of the directors of the Company who were authorised to allot
and issue the preference shares at their discretion until the next Annual
General Meeting of the Company.
5. Details of the offer for subscription
5.1 Particulars of the offer for subscription
Subscription price per preference share
(which equates to a par value of R0,01 and a premium of
R99,99 per preference share) R100
Minimum Rand value of subscription per applicant acting as principal
R100 000
Number of preference shares offered 5 000 000
Amount to be raised in terms of the offer for subscription R500 000 000
5.2 Important dates for the offer for subscription
Opening date of the offer for subscription (09:00) Monday, 14 June 2004
Closing date of the offer for subscription (12:00) Friday, 2 July 2004
Listing date (09:00) Wednesday, 7 July 2004
5.3 Condition to the listing
The JSE has granted Standard Bank Group a listing of a maximum of 30 000 000
preference shares in the Specialist Securities - `Preference Shares` sector.
The listing is subject to the condition that Standard Bank Group meets the
requirements of the JSE in respect of the requisite spread of preference
shareholders, being a minimum of 50 (fifty) public preference shareholders,
excluding employees and their associates.
5.4 Over-subscriptions
The directors of Standard Bank Group reserve the right to accept all
subscriptions, in whole or part up to a maximum of R1 billion.
If the offer for subscription is oversubscribed, all applications will be
reduced pro rata on an equitable basis, as determined by the directors in
their sole discretion, subject to the minimum subscription amount of R100 000
for a single addressee.
6. Salient features of the preference shares
The preference shares are non-redeemable, non-cumulative and non-
participating. Preference dividends are payable semi-annually on at least 7
(seven) business days prior to the date on which Standard Bank Group
pays its ordinary dividend, if any, in respect of the same period. In any
event, the preference dividend, if declared, shall be payable not later than
120 (one hundred and twenty) business days after 30 June and 31 December,
respectively.
6.1 Voting rights
The preference shares are non-voting, save for the circumstances as
prescribed under Section 194 of the Companies Act, 1973 (Act 61 of 1973).
Preference shareholders will only be entitled to vote during periods when a
preference dividend which has been declared, or any part thereof, remains
in arrears and unpaid after six months or when a resolution of Standard
Bank Group is proposed which directly affects the rights attached to the
preference shares or the interests of the preference shareholders.
6.2 Entitlements to dividends
Preference shareholders will receive, if declared, an annual dividend, payable
in two semi-annual instalments, of not less than 70% of the prime overdraft
lending rate of Standard Bank multiplied by the subscription price of the
preference shares, being R100, held by a preference shareholder. Preference
shareholders will be entitled to receive dividends out
of profits of Standard Bank Group after the holders of the 6,5% first
cumulative preference shares of R1,00 each in the issued share capital of
Standard Bank Group. Standard Bank Group will not declare an ordinary dividend
unless the preference dividend has been declared.
7. Important considerations for prospective investors
Prospective investors should be aware that any future actions by Standard
Bank Group referred to in paragraph 1 above could have the effect of
reducing the Group`s ordinary shareholders` equity. These actions are also
likely to reduce the Group`s regulatory capital adequacy ratio.
In making an investment decision, prospective investors should, accordingly,
assume that Standard Bank Group may elect to take certain actions that could
reduce ordinary shareholders` equity by approximately R4 billion. This
should be seen in the context of the Group`s ordinary shareholders` equity of
R28.7 billion as at 31 December 2003.
The issue of preference shares will increase both primary and total capital
adequacy. For illustrative purposes, based on the Group`s total capital adequacy
ratio of 14,8% at 31 December 2003, a preference share issue of R2 billion would
increase this ratio by 0,8% and a subsequent reduction in ordinary shareholders`
equity of R4 billion would reduce it by 1,6%, resulting in a potential net
reduction of 0,8% to 14,0%.
8. Copies of the Pre-Listing Statement
Copies of the Pre-listing Statement can be obtained during normal business
hours prior to 12:00 on Friday, 2 July 2004, from:
Standard Bank Group, 9th Floor, Standard Bank Centre, 5 Simmonds Street,
Johannesburg;
the sponsors, being Standard Bank, 5th Floor, 3 Simmonds Street,
Johannesburg and Deutsche Securities (SA) (Proprietary) Limited, 3rd Floor,
3 Exchange Square, 87 Maude Street, Sandton; or
Computershare Investor Services 2004 (Proprietary) Limited, Ground Floor,
70 Marshall Street, Johannesburg.
Alternatively, copies of the Pre-listing Statement can be viewed and/or
printed from the Standard Bank Group website, www.standardbank.co.za.
Any prospective investor with questions in relation to the Standard Bank
Group Preference Share Offer is invited to contact Standard Bank Group`s
information agent service provider, Georgeson Shareholder Communications, on
0800 006 709 or +27 (0)11 373 0041 if calling from outside South Africa.
Calls may be monitored for quality control purposes. Queries may also be
directed by email to preferenceshares@standardbank.co.za.
Johannesburg
14 June 2004
Investment bank and joint sponsor
Standard Bank
Legal adviser
Bowman Gilfillan
Attorneys
Joint auditors
KPMG Inc.
PriceWaterhouseCoopers Inc.
Chartered Accountants (SA)
Registered Accountants and Auditors
(Registration no 1998/012055/21)
Independent lead sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 14/06/2004 07:00:10 AM Produced by the JSE SENS Department
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