Statement re Nedcor Ltd
Old Mutual PLC
18 May 2000
OLD MUTUAL plc
Nedcor Ltd wins the bid for South African FBC Fidelity Bank
Old Mutual plc announces that its banking subsidiary Nedcor
Ltd. has today been selected by the Curator of Banks in South
Africa to acquire control of FBC Fidelity Bank (FBC Fidelity).
Under a scheme of arrangement agreed with the former
shareholders Nedcor will inject approximately R500million of
new capital and merge FBC Fidelity with its own Peoples Bank
to form South Africa's biggest empowerment bank. The merger
will consolidate Nedcor's position as one of the pre-eminent
lenders to the underbanked consumer and emerging business
markets.
The purchase price will be the positive net asset value (NAV)
of FBC Fidelity at the effective date of acquisition, after
providing for Nedcor's assessment of the value of advances and
loans and the cost of the merger with Peoples Bank. A final
NAV (with a reassessment of provisions at the effective date)
will be determined as at 30 June 2001. If the final NAV is
positive, FBC Fidelity Bank Holdings Ltd (the current holding
company of FBC Fidelity) will receive ordinary shares in the
merged Peoples Bank/FBC. If the final NAV is negative, Nedcor
will draw upon subordinated loans to restore the NAV to a
neutral position.
Nedcor has been given assurance by the appropriate regulators
that the FBC Fidelity transaction will not affect their
assessment of Nedcor's proposed Stanbic transaction in any
way. The merged bank will have strong management capacity
taken from both its existing resources and those of its
empowerment shareholders, and will in no way affect Nedcor's
ability to manage the integration of the merged Nedcor/
Stanbic entity.
The FBC transaction is subject to the approval of creditors,
the High Court, and other regulatory bodies.
Richard Laubscher, Nedcor chief executive, said:
'Our due diligence shows that FBC Fidelity is trading
profitably and the acquisition is based on sound business
principles. Nedcor is well capitalised with a capital adequacy
ratio of 12% which exceeds both current legislation and the
anticipated new capital adequacy requirements. Nedcor would
therefore not require any capital raising for its existing
businesses or for this transaction.'
18 May 2000
Enquiries
Old Mutual Tel: +44 20 7569 0100
James Poole
College Hill Tel: +44 20 7457 2020
Nicholas Williams
Tony Friend
College Hill, South Africa Tel: +27 11 447 3030
Graham Fiford
Notes to editors
FBC Fidelity Bank
The bank's parent company is FBC Fidelity Bank Holdings Ltd.
The bank was formed in August 1998 when Future Bank merged
with Fidelity Bank. After experiencing liquidity problems, the
bank was put under curatorship in October 1999. The bank's
retail focus is on the lower- and middle-income market where
it holds a strong position in home loans and microlending with
over 110 000 customers.
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