Mauritius: SBM group restructuring moves with approval to list SBM holding shares
Meanwhile, SBM is still awaiting the go-ahead of the Mauritius central bank, further to its submission of an application for the restructuring of the group on August 22, 2014. (Image: New African Manager)
In line with the proposed restructuring of the SBM Group, the Listing Executive Committee of the Stock Exchange of Mauritius (SEM) gave its approval on September 18, 2014 to the proposed listing of 30,374,022,300 ordinary shares of SBM Holdings Ltd (SBMH) on the official market.
The board of SBM has been contemplating the restructuring of the group into banking and non-banking segments, since as far back as 2010, with regard to international trends and in line with central bank directives.
The fact that SBM has expansion strategies for other geographies, including Asia and Eastern Africa and is also actively seeking to diversify into new lines of business, has made the restructuring exercise even more fundamental.
The board of directors at SBM based their decision of proceeding with the restructuring of the group under Section 32A of Banking Act, after carefully analysing the pros and the cons of the take-over offer by SBM Holdings Ltd; scheme of Arrangement by virtue of Section 262 of Companies Act; and restructuring under Section 32A of the Banking Act.
Within the scope of restructuring of the SBM Group, ordinary shares of SBM will be exchanged for the shares in SBM Holdings Ltd in a 1:1 ratio.
Under Section 32A of the Banking Act, both the boards of SBM and SBMH have approved the restructuring exercise as amended on August 14, 2014 and August 11, 2014 respectively.
After the completion of the restructuring exercise, SBMH will become the bank financial investment holding company of the group.
The share capital of SBMH will comprise of 30,374,022,300 ordinary shares, whose value will be based on the indicative price equivalent to the closing price of SBM shares on its last day of trading on 25th September 2014.
The bonds issued by SBM under its Class A 1 Series – Rs 1.5 billion with interest rate floating and reaching maturing in 2024 – and Class B 1 Series – USD 65.04 million floating interest rate senior unsecured bonds maturing in 2021 – will also be transferred to SBMH within the framework of the restructuring exercise.
Further, on the first day of trade on October 3, 2014, a minimum of 500 ordinary shares of SBMH will be made available for trading at an indicative price equivalent to the closing price of the ordinary shares of SBM on its last trading day on 25 September 2014.
Also, a minimum of 100 Class A 1 Series Bonds and 100 Class B 1 Series Bonds (or such higher number as the board may at its sole discretion determine) will be made available for trading.
Besides, the Bank of Mauritius (BoM) requested SBM to set up Special Purpose Vehicles to cluster the different segments of activities, hence three companies have been set up: SBM (Bank) Holdings Ltd, SBM (NBFC) Holdings Ltd and SBM (NFC) Holdings Ltd.
According to SBM management, SBMH has been created to hold three activities, namely: the banking activities through a SPV, SBM (Bank) Holdings Ltd; the non-banking financial activities through another SPV, SBM (NBFC) Holdings Ltd; and other investments/properties through a third SPV, SBM (NFC) Holdings Ltd.
The SBM communiqué highlighted that the non-banking subsidiaries and the other non-financial equity investments have already been moved under their respective segments.
In addition, SBM has also applied the Financial Services Commission (FSC) to seek the waiver of the mandatory offer under securities take-over rules, and the approval for the exchange of shares of SBM for the shares of SBMH to be conducted off-market.
Meanwhile, SBM is still waiting for the approval of the BoM further to its submission of an application for the restructuring of the group on August 22, 2014.
As soon as BoM gives the go-ahead, State Bank of Mauritius Ltd will assume its new identity as SBM Bank (Mauritius) Ltd.
Following the restructuring, it will be fully owned by SBM Holdings Ltd, which has become the holding company of the Group.