African Bank has reopened its doors in South Africa after remaining under curatorship for 20 months.
The bank said that it will retain its previous name and corporate identity, and has started operations with an equity base of ZAR10bn ($665.3m) and a cash position of about ZAR24bn ($1.6bn).
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The new lender will shift away from its previous unsecured lending model. It will now offer a range of financial products, while including services such as financial advice.
"About two-thirds of the bank’s issued debt is today listed on the Johannesburg Stock Exchange Ltd, the London Stock Exchange and the Swiss Securities Exchange. The remaining third will be held in the form of unlisted corporate bilateral deposits," the bank stated.
The bank was placed under curatorship by the South African Reserve Bank on August 2014, following its collapse due to bad debts. Tom Winterboer was appointed as the curator.
PwC chief restructuring advisor to the African Bank group David Gard said: "The curatorship was an essential tool to create operational stability and time to optimise the resolution plan. The proposed restructuring saw over 95% of the senior creditors accept the proposal in which they agreed to an effective 10% haircut with 90% of their debt being exchanged for similar instruments in the new African Bank.
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By GlobalDataThe structure implemented ring fences new capital from possible historic problems and leaves the new African Bank in a strong position to support growth."
