By Renee Bonorchis
(Bloomberg) — African Bank Investments Ltd., the unsecured lender that collapsed last year, said its viable assets will begin trading as part of a new banking entity in February, delaying its start from an initial October deadline.
The lender Wednesday also released an information memorandum, giving details on changes to the lender brought about by its rescue by the South African central bank. Comments can be made on the memorandum until Oct. 9 and a final document is planned for Oct. 26, after which the Minister of Finance will have to approve the plan by Dec 8, the Johannesburg-based bank said in a statement.
Read also:Â Unsecured lender African Bank narrows six month loss to R2.8b
To rescue the lender and create a so-called good bank from its viable assets, administrator Tom Winterboer and his team have had to get banking laws changed, appoint new directors, fire some staff, negotiate with investors, produce financial results and arrange a sale of the lender’s Standard General Insurance Co. to a group of banks.
When African Bank first failed in August 2014, senior bondholders faced a 10 percent loss while all other investors stood to lose everything. After negotiations, the lender agreed in May that subordinated debt holders may recoup 37.5 percent of their investments.
An investigation into whether fraud or reckless lending was responsible for the collapse of African Bank will be published by the South African Reserve Bank by year end.
Read also:Â Wealth-building lessons from African Bank saga
