African Bank has taken a significant step toward expanding its footprint in the secured lending market by entering into a binding offer to acquire Eskom’s staff home loan book.
The acquisition involves assets from Eskom Finance Company SOC Limited (EFC) and Nqaba Finance 1 (RF) Limited (Nqaba).
Selected as the preferred bidder, African Bank is in the process of finalizing sale and purchase agreements for the acquisition, estimated to be worth R5.7 billion. The deal, aligned with African Bank’s Excelerate25 strategy, is set to diversify the bank’s product portfolio while leveraging Eskom’s established infrastructure and strong market relationships.
The acquisition is subject to several conditions precedent, including board and regulatory approvals. If all goes as planned, the transaction could be finalized by May 31, 2025. However, African Bank has acknowledged potential timing variations due to dependencies on external regulatory bodies that are not party to the agreement.
This move marks a bold stride for African Bank as it integrates the home loan book into its operations, signaling its commitment to enhancing capabilities and growing its presence in the secured home loan lending market.
Earlier today, Eskom informed investors that it has accepted a binding offer from African Bank for the staff home loan book and assets housed in Eskom Finance Company SOC Limited and its interests in Nqaba Finance 1 (RF) Limited (the ‘Disposal’).
The parties are currently in the process of concluding a sale and purchase agreement, said Eskom.
The disposal is subject to various conditions precedent, including board and regulatory approvals,”and it is anticipated that the Disposal will be concluded by 31 May 2025.
African Bank announced that it has entered into a binding heads of agreement with Sasfin Bank and Sasfin Private Equity Investment Holdings, a subsidiaries of the listed entity Sasfin), to acquire its Capital Equipment Finance (‘CEF’) and its Commercial Property Finance (‘CPF’) businesses, as going concerns in one indivisible transaction.
The value of the transaction is approximately R3.2 billion, using the 28 February 2023 net asset values for the CEF and CPF advances books, which will be adjusted at the closing date of the transaction.
The CEF business is valued at R2.4 billion, consisting of the advances book and a goodwill component, with the CPF business value determined at R820 million consisting of the advances book and associated shares and claims in this business.
The transaction is subject to various conditions precedent which are to be concluded by 28 February 2024, and include;
- requiring the favourable outcome of a due diligence review,
- board of director approvals,
- Prudential Authority and other regulatory approvals.
The parties acknowledge that the Prudential Authority is not a party to the agreement and cannot be held liable in terms of time stipulations, as it is subject to regulatory requirements that must be met before approvals can be granted.
