Johannesburg - African Bank, which almost collapsed in 2014 under a mountain of bad debt, said on Friday it would issue a 10-year R1.65-billion domestic medium-term bond to be traded on the Johannesburg Stock Exchange as part of its debt-restructuring agreed with lenders to transform it into a “good bank”.
The floating interest rate of the new bond will be the three-month JIBAR rate plus 7.25 percent.
The Johannesburg Interbank Agreed Rate (JIBAR) is the money market rate used in South Africa. It is calculated as the average interest rate at which banks buy and sell money.
Tom Winterboer, appointed curator when the bank collapsed in August last year, announced on Wednesday that the restructuring proposal, which entails the creation of a so-called “good bank” from the bad one, had been agreed in principle.
African Bank has delayed the publication of its financial results due to talks over its restructuring. It had been expected to report in April.
After the bank nearly collapsed last August, the South African government appointed external administrators to oversee a restructuring. The bank’s financial year ended on September 30, 2014.
The curator expects to release the reviewed results for African Bank for the six months ended 31 March 2015 during June 2015.
ANA