AFRICAN Bank Investments Limited’s (Abil’s) business rescue practitioners are still to hand over documents the court ordered them to give to empowerment vehicles Hlumisa and Eyomhlaba relating to the sale of insurer Stangen to the bank.
They also had not consulted with these shareholders about the sale, Max Ahmen, attorney for the empowerment shareholders, said on Friday.
“The respondents have not formally complied as they claim their senior counsel says their application to appeal suspends the order. We disagree, and will in due course argue that.”
Business rescue practitioners Dawie van der Merwe and John Evans said last week they had applied to appeal against the judgment, but were “engaging” Abil’s shareholders. Mr van der Merwe did not respond to requests for comment.
Last month, Hlumisa and Eyomhlaba obtained an interdict halting a meeting of creditors to approve Abil’s business rescue plan, which included the sale of the insurer.
The High Court in Pretoria ordered Mr van der Merwe and Mr Evans to hand over certain documents and correspondence relating to Stangen’s sale, including a KPMG valuation report on its shares.
Hlumisa chairman Desmond Lockey argued in court papers that African Bank’s R1.4bn offer undervalued Stangen and would prejudice investors whose Abil shareholding “will be completely decimated as a result of the sale of Abil’s main asset”.
Mr Lockey said the two empowerment vehicles, representing about 13,000 black investors, had invested about R268m in Abil, and reinvested R660m in dividends they were compelled to pump back into the company over nine years.
They lost a collective R1.5bn in equity value when Abil collapsed under a heap of bad debt last year.
African Bank curator Tom Winterboer is not willing to defer restructuring to accommodate delays, which may become “substantial”, in acquiring Stangen. His aim was for the restructuring proposal to become effective on February 1.
The bank said on Friday it still considered Stangen a worthwhile part of Mr Winterboer’s plan to restructure African Bank into a good bank and a residual bank, but alternative options available to him did not merit delaying the restructuring.
Mr Winterboer said he could not divulge how many alternatives African Bank had to the insurer. The good bank restructuring proposal “is the best outcome, whether Stangen is acquired or not”.
Interested parties had until 5pm last Friday to comment on the proposal, but Mr Winterboer has given them more time.
“We have not placed a timeline on the extension, but said we intend to update the market before October 23, together with an amended closing date for comments,” he said.
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