Sasfin Holdings said it has bought over all entire loan book of Absa Technology Finance Solutions Proprietary Limited.
Sasfin said the entire loan book comprises loans and rental contracts including non-performing loans (“NPL”), loans
eligible for securitisation and loans not eligible for securitisation.
In addition to acquiring the Loan Book, Sasfin it will take on ATFS’ staff and acquire ATFS’ information technology (“IT”) systems related to the management of the Loan Book.
See below details of the acquisition:
Nature of ATFS’ business
ATFS provides discounting and direct financing solutions to suppliers and discounting partners secured against technology rental agreements.
Rationale for the Acquisition
The Acquisition affords the Sasfin group the opportunity to grow its rental book and acquire a new customer base.
Consideration for the Acquisition
The consideration for the Loan Book at the Effective Date (as defined below) will be determined by applying agreed prime-linked discount rates to the variable and fixed rate portions of the Eligible and Non-Securitisable Loan Books (“Price Mechanism”).
Sasfin or its nominee will take over for nominal consideration all NPL at the Effective Date, determined in accordance with ATFS policies and procedures consistently applied. For indicative purposes only, the consideration for the Loan Book, including the NPL, at 31 December 2016 as determined in accordance with the Price Mechanism was ZAR1 458 468 446. The final consideration for the Loan Book at the Effective Date may necessarily be higher or lower than this amount as determined using the Pricing Mechanism.
Sasfin has further offered a nominal amount for the IT systems, including all sub-programs, data and any ancillary systems required for the effective management of the Loan Book.
Settlement of the Acquisition consideration
The Acquisition consideration will be payable in cash on the Effective Date of the
Acquisition. The Eligible Loans purchase will be financed by securitising the Eligible
Loans through the South African Securitisation Programme (RF) Limited (“SASP”), a
special purpose securitisation vehicle administered by, and for the benefit of Sasfin,
which will be regulated in the Definitive Agreements.
The Non-Securitisable Loans purchase will be settled from existing facilities and/or
resources.
2.5 Conditions precedent and Effective Date
The Acquisition is subject to the fulfilment or waiver of conditions precedent 2.5.1 and
2.5.2 by no later than 30 April 2017 and conditions precedent 2.5.3 to 2.5.8 by no
later than 30 June 2017 or such later date/s as may be agreed by the parties:
2.5.1 the drafting, negotiation and execution of all and any mutually satisfactory definitive
agreements required to give effect to the Acquisition, which agreements will include
conditions, representations, warranties, indemnities and other terms that are
customary for a transaction of this nature (collectively, “Definitive Agreements”);
2.5.2 the approval by the board of directors of Sasfin, ATFS and the relevant Barclays
Africa Group Limited internal governance committees of the binding terms of the
Definitive Agreements;
2.5.3 regulatory approvals to the extent required (including Competition Commission) and
shareholder approvals as required by Sasfin and ATFS as may be the case;
2.5.4 a comprehensive credit rating to be performed by Global Credit Rating Co. to the
satisfaction of Sasfin acting reasonably;
2.5.5 the aforementioned credit rating to confirm that at least 90% of the Loan Book by
value will constitute Eligible Loans meeting the eligibility criteria of SASP at the
Effective Date;
2.5.6 the consent of all relevant third parties to the transfer or change in control of all
material contracts, leases, supply agreements, and intellectual property, where
required;
2.5.7 fulfilment of the requirements in accordance with section 197 of the Labour Relations
Act of 1995; and
2.5.8 SASP confirming in writing to Sasfin and ATFS that it has secured the necessary
investor commitments required for the purchase of the Eligible Loans by SBL.
The effective date shall be the first business day of the calendar month following
fulfilment of the final condition precedent or other date as agreed to by the parties
(“Effective Date”).
3. THE NET ASSETS AND PROFITS ATTRIBUTABLE TO THE LOAN BOOK
The audited value of the net assets that are the subject of the Acquisition and the
audited profit after tax attributable to such net assets are still being finalised and will be
provided to Shareholders in due course. Accordingly, Shareholders are advised to
exercise caution when dealing in the Company’s securities until this information is made
available.
4. CATEGORISATION OF THE ACQUISITION
The Acquisition is a Category 1 transaction in terms of the JSE Limited Listings
Requirements and therefore requires Shareholder approval. A circular incorporating a
notice convening a general meeting and setting out information regarding the
Acquisition will be despatched to Shareholders in due course.
