Post on 06-Apr-2018
BD-#29184946-v13
LISTING PARTICULARS
Ecobank Transnational Incorporated
(Incorporated in Togo on 3 October 1985 as a public limited liability company with registration number: 1986B1575)
Issue of
U.S.$150,000,000 Floating Rate Reset Convertible Notes due 2022
The U.S.$150,000,000 Floating Rate Reset Convertible Notes due 2022 (the “Notes”) will be issued by Ecobank Transnational Incorporated (the “Issuer”, the “Company” or “ETI”). The Notes will bear interest at a rate, reset semi-annually, equal to three month U.S. dollar London Interbank Offered Rate plus 6.46% per annum. The Issuer will pay interest on the Notes semi-annually in arrear on 5 January and 5 July in each year. The first payment (for the period from and including 19 October 2017 (the “Issue Date”) to but excluding 5 January 2018) shall be made on 5 January 2018, and the last payment (for the period from and including 5 July 2022 to but excluding 19 October 2022 (the “Maturity Date”)) shall be made on the Maturity Date. Unless previously purchased and cancelled, redeemed or converted, the Notes will be redeemed at 110% of their principal amount on the Maturity Date.
The Notes will constitute the direct, unconditional, unsubordinated and unsecured obligations of the Issuer and will rank pari passu among themselves and (save for certain obligations required to be preferred by law) equally with all other unsecured obligations (other than subordinated obligations, if any) of the Issuer, from time to time outstanding. The Notes will be obligations of the Issuer only and will not be obligations or responsibilities of, or guaranteed by, any of the other parties to the transactions described in these Listing Particulars and any suggestion otherwise, express or implied, is expressly excluded.
Application has been made to the London Stock Exchange for the Notes to be admitted to the London Stock Exchange’s International Securities Market (“ISM”). The ISM is not a regulated market for the purposes of Directive 2004/39/EC.
The ISM is a market designated for professional investors. Notes admitted to trading on the ISM are not admitted to the Official List of the UKLA. The London Stock Exchange has not approved or verified the contents of these Listing Particulars.
The requirements to publish a prospectus under Directive 2003/71/EC, (as amended, including by Directive 2010/73/EU and includes any relevant implementing measures in a relevant Member State of the European Economic Area) (the “Prospectus Directive”) do not apply to the Notes which are only offered in circumstances where an exemption is available under Article 3.2 of the Prospectus Directive (as implemented in the relevant Member State(s)).
The Notes have not been approved or disapproved by the United States Securities and Exchange Commission (the SEC), any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of these Listing Particulars. Any representation to the contrary is a criminal offence in the United States. The Issuer has not been registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and the Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation S under the Securities
Act (“Regulation S”) and the Notes may not at any time be offered or sold within the United States or to U.S. Persons as defined in Regulation S. See “Subscription and Sale”.
These Listing Particulars and the Notes have not and will not be registered under the securities laws of any state or jurisdiction and have not been approved or recommended by any securities or exchange regulatory body. These Listing Particulars do not constitute an offer to sell or the solicitation of an offer to buy the Notes in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of these Listing Particulars and the offer or sale of Notes may be restricted by law in certain jurisdictions. For a description of certain restrictions on offers and sales of Notes and on distribution of these Listing Particulars and any other offering material relating to the Notes in the United States, the European Economic Area (including the United Kingdom), Ghana, Nigeria and the UEMOA (as defined below), see “Subscription and Sale”.
Notes will be offered and sold in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof. The Notes will be issued in definitive registered form, without interest coupons. On the Issue Date, the Notes to be purchased by a Purchaser will be deposited with such Purchaser and will be registered in such Purchaser’s name (or in the name of its nominee), against delivery by or on behalf of such Purchaser to the Issuer or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Issuer.
As at 10 August 2017, Fitch Ratings Ltd affirmed the Issuer’s Long-Term Issuer Default Rating at ‘B’ with a stable outlook. The Notes have not been and will not be specifically rated by any rating agency. There can be no assurance that, if the Notes were specifically rated by any rating agency, they would have the same ratings as the Issuer’s Long-Term Issuer Default Rating. A rating is not a recommendation to buy, sell or hold securities in the Issuer and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. A suspension, reduction or withdrawal of the default rating could result in a reduction in the trading value of securities in the Issuer, including the Notes.
In these Listing Particulars, unless otherwise specified, all references to “dollars” “USD”, “US$”, “U.S.$”, “$”, “c” or “cents” are to the lawful currency of the United States of America, all references to “Naira” are to the lawful currency of Nigeria, all references to “cedi” are to the lawful currency of Ghana and all references to the “CFA” are to the lawful currency of countries of the Francophone West African Countries of the Union Economique et Monétaire Ouest Africaine (“UEMOA”).
Investing in the Notes involves certain risks. The principal risk factors that may affect the ability of the Issuer to fulfil its obligations under the Notes are discussed under “Risk Factors” below. In particular only a Noteholder who is an existing Shareholder of the Issuer can exercise Conversion Rights. See “Risk Factors – Limitation on exercising Conversion Rights”.
The date of these Listing Particulars is 19 October 2017
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Contents
Clause Page
Overview .................................................................................................................................................5
Definitions..............................................................................................................................................11
Risk Factors ..........................................................................................................................................16
Documents Incorporated by Reference ................................................................................................25
Use of Proceeds....................................................................................................................................26
Description of the Issuer and the Group ...............................................................................................27
Subscription and Sale ...........................................................................................................................35
General Information...............................................................................................................................37
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ABOUT THIS DOCUMENT
The Issuer accepts responsibility for the information contained in these Listing Particulars. Having taken all reasonable care to ensure that such is the case, the information contained in these Listing Particulars is, to the best of the issuer’s knowledge, in accordance with the facts and contains no omission likely to affect its import.
As at the date of these Listing Particulars, there are no potential conflicts of interest between any duties owed to the Issuer by the Directors (as defined below under “Description of the Issuer and the Group - Administrative, Management and Supervisory Bodies”) and the private interests and/or other duties owed by these individuals and there are no arrangements, known to the Issuer, the operation of which may at a subsequent date result in a change in control of the Issuer.
Furthermore, as of the date of these Listing Particulars, there are no material contracts that have been entered into outside the ordinary course of the Issuer’s business, which could result in any member of the Group being under an obligation or entitlement that would be material to the Issuer’s ability to meet its obligation to the Noteholders.
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OVERVIEW
This overview must be read as an introduction to these Listing Particulars. This overview is a summary of the terms of the Notes only and is subject to the detailed provisions of the Note Purchase Agreement. Any decision to invest in the Notes should be based on a consideration of the Listing Particulars as a whole, including any information incorporated by reference and the detailed provisions of the Note Purchase Agreement.
Words and expressions defined elsewhere in these Listing Particulars have the same meanings in this overview.
The Issuer will issue the Notes pursuant to the Note Purchase Agreement. A copy of the Note Purchase Agreement including the form of the Notes is available for inspection during normal business hours at the office of the Issuer set forth on the last page of these Listing Particulars.
PARTIES
Issuer / Company / ETI Ecobank Transnational Incorporated, a public limited liability company with its registered office at 2365 Boulevard du Mono, Lomé, Togo and registered number 1986 B 1575.
Joint Auditors Akintola Williams Deloitte, Nigeria.
Grant Thornton, Côte d’Ivoire.
PRINCIPAL TERMS OF THE NOTES
Issue U.S.$150,000,000 Floating Rate Reset Convertible Notes due 2022, convertible into Ordinary Shares in the Issuer.
Issue Date 19 October 2017.
Issue Price 100% of the principal amount of the Notes.
Maturity Date 19 October 2022.
Redemption Amount Unless previously repaid, redeemed, converted or otherwise cancelled prior to the Maturity Date, the Issuershall pay 110% of the principal amount of the Notes then outstanding on the Maturity Date.
Status of the Notes The Notes constitute direct, unsubordinated, unsecured and, upon issue, unconditional obligations of the Issuer subject to the Note Purchase Agreement. The Notes are the obligations solely of the Issuer and not obligations of, or guaranteed by, any other person. The Notes rank pari passu without preference among themselves.
Interest Rate The Interest Rate for the initial Interest Period from and including the Issue Date to but excluding the first Interest Payment Date is the three-month LIBOR, as determined by the Issuer as of 13 February 2017 (being 1.03900%) plus 6.46% per annum. Thereafter, the Interest Rate for any Interest Period will be the three-month LIBOR, as determined by the Issuer (rounded to the nearest 5 decimal places) as of the applicable Interest Determination Date, plus 6.46% per annum.
The Interest Rate will be reset semi-annually on each Interest Reset Date.
Interest Payment Dates Interest will be paid semi-annually in arrear on 5 January and 5 July in each year, commencing on 5 January 2018, and on the Maturity Date.
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Conversion Right Each holder which is also a Shareholder has the right to convert each Note (subject to a minimum principal amount of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof being converted) at the Conversion Price into fully paid Ordinary Share(s) in accordance with the provisions of the Note Purchase Agreement.
The Conversion Date in respect of a Note shall be as soon as reasonably practicable after the date of delivery of the Conversion Notice and, if applicable, the making of any payment to be made by the holder in respect of any stamp, issue and registration taxes (in accordance with the terms of the Note Purchase Agreement).
Conversion Period Subject to, and upon compliance with, the provisions of the Note Purchase Agreement, the Conversion Right in respect of a Note may be exercised, at the option of the holder thereof which is also a Shareholder (subject to any applicable fiscal or other laws or regulations):
(i) at any time from 19 October 2019 to the close of business on the Business Day falling six days prior to the Maturity Date (both days inclusive); or
(ii) at any time before 19 October 2019, provided that a Change of Control has occurred, from but excluding the date on which the Change of Control occurs up to and including the date falling 60 days following the occurrence of the Change of Control (or, if later, 60 days following the date on which notice of such Change of Control is given to holders of the Notes by or on behalf of the Issuer) (the “Change of Control Period”).
Conversion Price The initial conversion price of U.S.$0.06 per Ordinary Share, or upon a Change of Control, the Change of Control Conversion Price. The Conversion Price is not subject to adjustment.
Listing of the Ordinary Shares
The Ordinary Shares issuable upon conversion shall beadmitted to listing on at least one of the following stock exchanges: the Ghana Stock Exchange, Nigerian Stock Exchange or on the Bourse Régionale des Valeurs Mobilières, the regional stock exchange in Abidjan (or any other stock exchange where the Ordinary Shares of the Issuer may be admitted to listing from time to time),provided that the Issuer shall endeavour to obtain listing of all the Relevant Stock Exchange(s) for such Ordinary Shares as soon as possible.
Taxation All payments in respect of the Notes by the Issuer shall be made free and clear of withholding or deduction for or on account of, any present or future taxes of whatever nature imposed or levied by or on behalf of any jurisdiction (or any political subdivision or taxing authority of or in such jurisdiction), unless the withholding or deduction of such tax is compelled by law. If any deduction or withholding for any tax shall at any time be required in respect of any amounts to be paid by the Issuer under the Notes, the Issuer will not be required to pay additional or further amounts in respect of such withholding or deduction.
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Events of Default Upon the occurrence of any of the following events which is continuing:
(a) the Issuer defaults in the payment of any principal on any Note for more than 14 days when the same becomes due and payable, whether at maturity or by declaration or otherwise; or
(b) the Issuer defaults in the payment of any interest on any Note for more than 14 days after the same becomes due and payable; or
(c) the Issuer defaults in the performance of or compliance with any term contained in Clause 7.1(b) of the Note Purchase Agreement; or
(d) the Issuer defaults in the performance of or compliance with any term contained in the Note Purchase Agreement (other than those referred to in paragraphs (a), (b) or (c)) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Issuer receiving written notice of such default from any holder (any such written notice to be identified as a “notice of default” and to refer specifically to (d)); or
(e) the Issuer is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or interest on any indebtedness that is outstanding in an aggregate principal amount of at least U.S.$25,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (ii) the Issuer is in default in the performance of or compliance with any term of any evidence of any indebtedness in an aggregate outstanding principal amount of at least U.S.$25,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such indebtedness has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment.
(f) the Issuer:
(i) is generally not paying, or admits in writing its inability to pay, its debts as they become due;
(ii) files, or consents by answer or otherwise to the filing against it or, a petition for relief or reorganisation or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganisation, moratorium or other similar law of any jurisdiction and any such event is not discharged or challenged in good faith by the Issuer within 60 days;
(iii) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property;
(iv) is adjudicated as insolvent or to be liquidate;
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or
(v) takes corporate action for the purpose of any of the foregoing; or
(g) a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Issuer, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to the whole or substantially the whole of its property, or constituting an order for relief or approving a petition for relief or reorganisation or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Issuer, or any such petition shall be filed against the Issuer and such petition shall not be dismissed or challenged in good faith by the Issuer within 60 days; or
(h) any event occurs with respect to the Issuer which under the laws of any jurisdiction is analogous to any of the events described in paragraphs (f) or (g) above, provided that the applicable grace period, if any, which shall apply shall be the one applicable to the relevant proceeding which most closely corresponds to the proceeding described in paragraphs (f) or (g) above,
(x) then if any Event of Default described in paragraphs (a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Issuer, declare all the Notes held by it or them to be immediately due and payable; and
(y) if any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Issuer, declare all the Notes then outstanding to be immediately due and payable.
Negative Covenant The Issuer will not consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person, provided that, the Issuer may consolidate or merge or amalgamate with, or sell, lease or otherwise dispose of all or substantially all of its assets to, any other Person if:
(a) either
(i) the Issuer shall be the surviving or continuing Person; or
(ii) the surviving, continuing or resulting Person that purchases, leases or otherwise acquires all or substantially all of the assets of the Issuer:
(A) is a solvent corporation or limited liability company incorporated under the laws of
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any Permitted Jurisdiction; and
(B)expressly assumes the obligations of the Issuer hereunder and under the Notes, in writing which is in form and substance reasonably satisfactory to the Required Holders; and
(b) at the time of such transaction and after giving effect thereto no Default or Event of Default shall have occurred and be continuing.
No such conveyance, transfer or lease of substantially all of the assets of the Issuer shall have the effect of releasing the Issuer or any successor corporation or limited liability company that shall theretofore have become such in the manner prescribed above, from its liability under the Note Purchase Agreement or the Notes.
Form and Denomination Each of the Notes will be issued in definitive registered form, without interest coupons, in denominations of U.S.$200,000 and integral multiples of U.S.$1,000 in excess thereof.
Transfers Upon surrender of any Note certificate to the Issuer at the address and to the attention of the designated officer for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note certificate or such holder’s attorney duly authorised in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof) within 10 Business Days thereafter, the Issuer shall execute and deliver one or more new Note certificate(s) (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note certificate. Notes shall not be transferred in denominations of less than U.S.$200,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than U.S.$200,000.
Modification The terms of the Notes may be amended or waived (either retroactively or prospectively) only with the written consent of the Issuer and the Required Holders.
Certain amendments and waivers may only be made with the written consent of the Issuer and the Super-majority Holders (and include the following):
(a) changing the amount or time of any payment of principal of, or reduce the rate or change the time of payment or method of computation of interest on the Notes;
(b) changing the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver; and
(c) amending certain provisions relating to payments, the Conversion Right, Events of Default and acceleration, tax, confidentiality and currency ofpayment.
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Governing Law The Notes and any non-contractual obligations arising out of or in connection with them will be governed by and shall be construed in accordance with English law.
Selling Restrictions For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of offering material, including distribution in the United States of America, Ghana, Nigeria, the UEMOA, the United Kingdom and the European Economic Area, see “Subscription and Sale” below.
Trading of the Notes Application has been made for the Notes to be admitted to trading on the ISM.
ISIN and SEDOL ISIN: CI0000002408
SEDOL: BF1G818
The Notes are issued in definitive registered form only, and will not be cleared or settled in any clearing systems (including Euroclear Bank SA/NV and Clearstream Banking, S.A.).
Risk Factors Investing in Notes involves certain risks. The principal risk factors that may affect the ability of the Issuer to fulfil its obligations under the Notes are discussed under “Risk Factors” below.
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DEFINITIONS
Unless otherwise defined in these Listing Particulars, capitalised words and expressions used in these Listing Particulars shall have the following meanings.
Affiliates Any other Person that at such time directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Issuer.
BRVM Bourse Régionale des Valeurs Mobilières, the regional stock exchange in Abidjan, Côte d'Ivoire.
Business Day Any day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in London, New York City and Togo.
Change of Control An offer is made to all (or as nearly as may be practicable all) Shareholders (or all (or as nearly as may be practicable all) such Shareholders other than the offeror and/or any associate of the offeror), to acquire all or a majority of the issued Ordinary Shares of the Issuer or if any person proposes a scheme with regard to such acquisition (other than an Exempt Newco Scheme) and (such offer or scheme having become or been declared unconditional in all respects) the right to cast more than 50 per cent of the votes which may ordinarily be cast on a poll at a general meeting of the Issuer has become unconditionally vested in the offeror and/or such associate as aforesaid.
Change of Control
Conversion Price
The lower of U.S.$0.07 per Ordinary Share and the Change of Control Offered Price per Ordinary Share.
Change of Control Offered
Price
The price paid and offered to all (or as nearly as may be practicable all) such Shareholders other than the offeror and/or any associate of the offeror, to acquire all or a majority of the issued Ordinary Shares of the Issuer, or under the scheme with regard to such acquisition.
Conversion Date The conversion date in respect of a Note shall be as soon as reasonably practicable after the date of delivery of the Conversion Notice and, if applicable, the making of any payment to be made by the holder in respect of any stamp, issue and registration taxes (in accordance with the terms of the Note Purchase Agreement).
Exempt Newco Scheme A Newco Scheme where immediately after completion of the relevant scheme of arrangement or analogous proceeding the ordinary shares of Newco (as defined below) are (1) admitted to trading on the Relevant Stock Exchange(s) or (2) admitted to listing on such other regulated, regularly operating, recognised stock exchange or securities market as the Newco may determine.
Fallback Interest Period One (1) week.
Financial Adviser A financial adviser appointed by Issuer in its sole and absolute discretion and at its own expense.
Governmental Authority (a) The government of the Togo or any state or other political subdivision of either thereof; or
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(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
GSE Ghana Stock Exchange.
Group The Issuer and its Subsidiaries.
Interest Determination Date The second Business Day immediately preceding the applicable Interest Reset Date.
Interest Reset Date Each date where the Interest Rate is reset semi-annually on 5 January and 5 July in each year, commencing on 5 January 2018; provided that if any Interest Reset Date would otherwise be a day that is not a Business Day, the Interest Reset Date will be postponed to the immediately succeeding day that is a Business Day, except that if that Business Day is in the immediately succeeding calendar month, the Interest Reset Date shall be the immediately preceding Business Day.
Interest Period The period from and including the Issue Date to but excluding the first Interest Reset Date, and subsequently, the period from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date; provided that the final interest period for the Notes will be the period from and including the Interest Reset Date immediately preceding the Maturity Date to but excluding the Maturity Date.
Interpolated Historic Screen Rate
In relation to any Note, the rate (rounded to the same number of decimal places as the two relevant LIBOR rates) which results from interpolating on a linear basis between:
(a) the most recent applicable LIBOR rate for the longest period (for which that LIBOR rate is available) which is less than the relevant Interest Period; and
(b) the most recent applicable LIBOR rate for the shortest period (for which that LIBOR rate is available) which exceeds the relevant Interest Period,
each for the currency of that Note and each of which is no more than five Business Days before the Interest Determination Date.
Interpolated Screen Rate In relation to any Note, the rate (rounded to the same number of decimal places as the two relevant LIBOR rates) which results from interpolating on a linear basis between:
(a) the applicable LIBOR rate for the longest period (for which that LIBOR rate is available) which is less than the relevant Interest Period; and
(b) the applicable LIBOR rate for the shortest period (for which that LIBOR rate is available) which exceeds the relevant Interest Period,
each as of 11:00 am (London time) on the Interest Determination Date for the currency of the Notes.
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LIBOR The applicable London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate). If such page or service ceases to be available, the Issuer may specify another page or service displaying the relevant rate of 11:00 am (London time) on the Interest Determination Date for the currency of the Notes and for a period equal in length to the relevant Interest Period of the Notes.
(a) If no LIBOR rate is available for an Interest Period, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period.
(b) Shortened Interest Period: If no LIBOR rate is available for:
(i) the currency of the Notes; or
(ii) an Interest Period and it is not possible to calculate the Interpolated Screen Rate,
that Interest Period shall (if it is longer than the applicable Fall Back Interest Period) be shortened to the applicable Fallback Interest Period and the applicable LIBOR for that shortened Interest Period shall be determined pursuant to the definition of LIBOR.
(c) Shortened Interest Period and Historic Screen Rate: If the Interest Period of a Note is, after giving effect to (b) above, either the applicable Fallback Interest Period or shorter than the applicable Fallback Interest Period and, in either case, no LIBOR rate is available for:
(i) the currency of the Notes; or
(ii) an Interest Period and it is not possible to calculate the Interpolated Screen Rate,
the applicable LIBOR shall be the Historic Screen Rate for the Notes.
(d) Shortened Interest Period and Interpolated Historic Screen Rate: If (c) above applies but no Historic Screen Rate is available for the Interest Period of the Note, the applicable LIBOR shall be the Interpolated Historic Screen Rate for a period equal in length to the relevant Interest Period of the Note.
(e) Reference Bank Rate: If (d) above applies but it is not possible to calculate the Interpolated Historic Screen Rate, the Interest Period of the Note shall, if it has been shortened pursuant to paragraph (b)above, revert to its previous length and the applicable LIBOR shall be the Reference Bank Rate as of noon on the Interest Determination Date for the currency of the Note and for a period equal in length to the relevant Interest Period.
(f) Substitute Rate: If paragraph (e) applies but no
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Reference Bank Rate is available for the currency of the Notes or an Interest Period, then the applicable LIBOR shall be the rate which the market deems as a substitute or replacement (or closest substitute or replacement) for LIBOR, or failing which, such rate as determined to be a fair substitute or replacement rate as advised by a Financial Adviser.
Newco Scheme A scheme of arrangement which effects the interposition of a limited liability company (“Newco”) between the Shareholders of the Issuer immediately prior to the scheme of arrangement (the “Existing Shareholders”) and the Issuer; provided that only ordinary shares of Newco are issued to Existing Shareholders and that immediately after completion of the scheme of arrangement the only shareholders of Newco are the Existing Shareholders and that all Subsidiaries of the Issuer immediately prior to the scheme of arrangement (other than Newco, if Newco is then a Subsidiary of the Issuer) are Subsidiaries of the Issuer (or of Newco) immediately after the scheme of arrangement.
Noteholder / holder With respect to any Note, the Person in whose name such Note is registered in the register of Noteholders maintained by the Issuer provided, however, that if such Person is a nominee, then “Noteholder” or “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
Note Purchase Agreement The Note Purchase Agreement, dated 19 October 2017 (as from time to time amended), between the Issuer and the Purchasers.
NSE Nigerian Stock Exchange
Ordinary Shares The ordinary shares of the Issuer having a nominal value on the Issue Date of U.S.$0.025 each and having been admitted to listing on the GSE, NSE or BRVM, the regional stock exchange in Abidjan (and all other (if any) shares or stock resulting from any sub-division, consolidation or re-classification of such shares).
Person An individual, partnership, corporation, limited liability company, association, trust, unincorporated organisation, business entity or Governmental Authority.
Purchasers The initial purchasers of the Notes on the Issue Date.
Reference Bank Rate The arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Issuer at its request by the Reference Banks:
(a) (other than where paragraph (b) below applies), as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the currency of the Notes and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonably market size in that currency and for that period; or
(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant
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currency and period) which contributors to the applicable LIBOR rate are asked to submit to the relevant administrator.
Reference Banks The principal offices in London of HSBC Bank plc and JPMorgan Chase & Co or such other entities as may be appointed by the Company, acting reasonably.
Relevant Stock Exchange(s) The principal stock exchange(s) or securities market(s) on which the Ordinary Shares are listed, admitted to trading or quoted or dealt in at the relevant time (being on the date of these Listing Particulars, the GSE, NSE and the BRVM).
Required Holders The holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Issuer or any of its Affiliates).
Responsible Officer Any Senior Financial Officer and any other officer of the Issuer with responsibility for the administration of the relevant portion of the Note Purchase Agreement.
Senior Financial Officer The chief financial officer, principal accounting officer, treasurer or comptroller of the Issuer.
Shareholders The holders of Ordinary Shares, each a “Shareholder”.
Subsidiary As to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Issuer.
Super-majority Holders The holders of more than 75% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Issuer or any of its Affiliates).
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RISK FACTORS
The Issuer believes that the following factors may affect its abilities to fulfil its obligations under Notes
because they may, directly or indirectly, adversely affect the Issuer’s financial results, businesses,
financial condition, prospects or liquidity. Most of these factors are contingencies which may or may
not occur and the Issuer is not in a position to express a view on the likelihood of any such
contingency occurring or the likelihood or extent to which any such contingencies may affect the price
of the Notes in the secondary market or an investor’s ability to sell its Notes in the secondary market
or the likelihood or extent to which any such contingencies may affect the ability of the Issuer to pay
interest, principal or other amounts on or in connection with any Notes.
In addition, certain factors, although not exhaustive, which could be material for the purpose of
assessing the market risks associated with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing
in Notes, but any change in the secondary market value of the Notes, the inability of an investor to sell
its Notes in the secondary market or the inability of the Issuer to pay interest, principal or other
amounts on or in connection with any Notes or to perform any of its obligations may occur for other
reasons and the Issuer does not represent that the statements below regarding the risks of holding
any Notes are exhaustive. The risks described below are not the only risks the Issuer faces.
Additional risks and uncertainties not presently known to the Issuer or that it currently believes to be
immaterial could also have a material impact on its business operations or affect the ability of the
Issuer to pay interest, principal or other amounts on or in connection with any Notes. Prospective
investors should also read the detailed information set out elsewhere in these Listing Particulars
(including the documents incorporated by reference) to reach their own views prior to making any
investment decisions.
Risks related to the Group
Sovereign Risk, Social and Terrorism Risks
Sovereign risk includes political, convertibility and cross-border risks. Such risks can arise from
actions of a sovereign state in which the Issuer operates or from unforeseen circumstances, such as
wars and civil unrest. Such occurrences could affect the ability of a party residing in one country to
meet their obligations to counterparties in other countries.
Nigeria, in which the Issuer has a major subsidiary, has experienced recurrent ethnic and religious
unrest and incidents of attacks resulting from ethnic or religious divides, particularly in the northern
part of the country. In December 2016, the Nigerian government claimed victory over Boko Haram, an
Islamic militant group operating predominantly in North-East Nigeria, which has been categorised as
an international terrorist group. Despite recent successes in combating insurgent groups, the risk of
insurgents regrouping remains and there have been recent reports of attacks by Boko Haram against
the Nigerian army. Future events such as these could have a direct impact on the Group. The Group
could suffer loss of properties in the regions affected by conflicts, and could incur additional expenses
in implementing extra security measures at branches in the affected areas. It might also have to limit
the operating hours of some branches at affected locations. Unless resolved by the Nigerian
Government, the conflicts described above may adversely affect Nigeria’s political and economic
17
stability which may, in turn, further affect the Group’s business, results of operations, financial
condition, prospects and share price.
Market Risks
The Issuer is exposed to the risk of loss arising from adverse changes in market conditions during the
period required to close out the Group’s on- and off-balance sheet positions. Losses may arise from
changes in interest rates, exchange rates, equity values and commodity prices. Most African
countries in which the Group operates are vulnerable to international oil and commodity price swings,
which can introduce, amongst others, liquidity risks, exchange rate fluctuations, interest rate and
commodity price volatilities. The Group is also exposed to both trading and non-trading risks. Trading
risk relates to positions that the Group holds as part of its trading or market-making activities, whilst
non-trading risk includes discretionary positions that the Group undertakes for liquidity or capital
hedging purposes. These economic parameters directly impact on the Issuer’s performance and
share price.
Equity and Commodity Price Risk
The Issuer is exposed to the risk of devaluation to its equity portfolio due to share price movements
and to commodity price risk from its portfolio of commodities being devaluated due to price
fluctuations.
Interest Rate and Liquidity Risk
The Issuer is exposed to interest rate risk and liquidity risk.
Interest rate risk can result from a variety of factors:
- Repricing risk - timing differences in the maturity or repricing of assets, liabilities and off-
balance sheet instruments.
- Yield curve risk - changes in market interest rates may have differing effects on prices of
similar instruments with different maturities.
- Basis risk - changes in market interest rates may have different effects on rates received or
paid on instruments with similar repricing characteristics (e.g. funding an adjustable rate loan
that is indexed to a 3-month Treasury bill with deposits that are indexed to the 3-month
LIBOR, as interest rates for various assets and liabilities may change at the same time, but
will not necessarily change by the same amount.
Liquidity risk that funds may not be available when needed to meet the Group’s financial
commitments and the risk that assets may not be able to be liquidated at reasonable market prices in
a short timeframe, which can occur when market liquidity disappears, making it difficult and/or costly
to close or modify positions without incurring significant losses. Liquidity risk arises from the general
funding needs of the Group and in the management of its assets and liabilities. The Group is exposed
to the risk that depositors’ demands for withdrawals outstrip its ability to realise longer-term assets in
cash. The Group, therefore, strikes a balance between its liquidity requirements and funding costs by
capturing stable, reliable and low-cost sources of funding in all of its markets. The interest rate and
18
liquidity risks described above could have a material impact on the Group’s business, results of
operations, financial condition, prospects and share price.
Currency Risk
The Issuer is exposed to foreign exchange risk to earnings and capital arising from sudden
fluctuations in currency exchange rates. This risk can arise directly through trading in foreign
currencies, through the making of loans in a currency other than the operational currencies of the
Issuer, buying foreign-issued securities or issuing foreign currency denominated debt as a source of
funds. It can also arise when assets and liabilities are denominated in foreign, as well as local,
currencies. The Group is also exposed to foreign exchange risk arising from adverse movements in
currency exchange rates used to translate carrying values and income streams in local currencies
relative to the U.S. dollar, the Issuer’s reporting currency.
A significant portion of the Group’s operations are concentrated in African economies and, as a
consequence, the Group’s income, operational results and the quality and growth of its assets
depends to a large extent on the performance of these economies. Any deterioration in economic
conditions could adversely affect the Group’s borrowers and contractual counterparties, which might
adversely affect the Group’s financial position. The Group may also suffer financial loss as a result of
adverse changes in market conditions in countries where it is present or in the global financial
markets in general.
Sustained depreciation in the currencies of countries within which the Issuer operates could adversely
impact the Issuer’s revenues, which are reported in U.S. dollars.
Credit Risk
Credit facilities extended to customers may involve direct, contingent, or counterparty risk. Direct
credit risk is the probability of financial loss when a borrower is unable to repay a loan on the agreed
terms. Contingent credit risk occurs when a member of the Group has guaranteed contractual
obligations of a customer and suffers a loss when the customer fails to fulfil its primary obligation and
is also unable to repay secondary obligations. Credit risk also exists when the Group and a client
have mutual obligations to exchange or deliver financial instruments at a future date.
The risk of default before settlement, also known as pre-settlement risk, arises when the counterparty
defaults before a contract matures and the Group suffers a financial loss in the process of replacing
the unexecuted contract. Credit risk in relation to the migration of a customer borrower can arise
either because the borrower is unwilling to consent to such migration or because their ability to
migrate has been impaired.
Options Risk
Options risk is inherent in embedded options in assets and liabilities, such as provisions in
agreements entered into by the Group that give borrowers the right (but not the obligation) to prepay
their loans, or give depositors the right (but not the obligation) to withdraw funds at any time, with little
or no penalty. If such options are exercised, the Group’s net interest income could be affected, which
could in turn impact its business, results of operations, financial condition, prospects and share price.
19
Operational Risks
Operational risk also includes legal risk, the risk of loss resulting from the failure to comply with laws,
prudent ethical standards and contractual obligations. These events can potentially result in
reputational risk for the Group.
Strategic and franchise risks arise when the Group launches a new product or service, or when it
implements a new strategy. There is a risk that a certain strategy may fail, causing damage to the
Group’s image, which could impair the Group’s ability to generate or retain business.
Reputational Risk
Reputational risk is the current or prospective risk to earnings and capital arising from an adverse
perception of the Issuer’s brand among existing and potential transactional stakeholders, such as
clients, trading counterparties, employees, suppliers, regulators, governmental bodies and investors.
The perceptions of stakeholders, such as the media, non-governmental organisations, trade unions,
competitors and the general public, can influence the Group’s ability to maintain existing relationships,
generate new business and maintain access to sources of funding.
Compliance and Disclosure Risk
Compliance risks relate to the effect of changes in the regulatory and legal environment of
jurisdictions within which the Group operates, and violation of rules and regulations by the Group.
These risks could pose compliance challenges and introduce significant competition to the Group.
The banking sector in most African countries, where the Group’s operations are concentrated are at
their early stages of development, and are highly fragmented, inadequately capitalised and have
evolving banking regulations. As the regulatory environment evolves, the Group may suffer adverse
effects, including compliance risk which may arise in situations where the laws or rules governing
certain products or services are ambiguous or untested. Compliance risk exposes the Group to the
risk of sanctions or penalties being imposed, damages being payable and the voiding of contracts.
Disclosure risk is the risk of suffering a loss due to the presentation of inaccurate or incomplete
information to the general public, shareholders or regulatory bodies. Non-compliance with accounting
rules and requirements for rendition of reports to regulatory and supervision or fiscal authorities could
also give rise to franchise and strategic risks. The Issuer, in addition to having the Notes admitted to
trading on the ISM, also has its equity securities listed on the GSE, the NSE and the BRVM and must
comply with disclosure obligations imposed by all of these exchanges.
Borrower Risk
Borrowers, who could suffer major financial losses including business closure for non-compliance with
legal environmental protection standards could adversely impact the reputation of the Group and its
subsidiaries through their association with such borrowers.
Non-performing Loans
The Issuer’s may have both external and internal asset quality issues in the future, both those
resulting from the impact of the difficult macroeconomic environment on borrowers’ ability to service
20
their loans and poor credit origination procedures within the Group. This could lead to higher non-
performing loans as a percentage of gross loans. For example, Nigeria’s asset quality issues were
exacerbated by the country’s economic recession.
Nigeria accounts for around 30% of the Group’s business and assets. The Nigerian economy has
been adversely affected by the decrease in oil prices and bottlenecks in production, including the
Group’s clients in the public, manufacturing, construction and retail sectors, which account for a
significant proportion of the Group’s business.
Wholesale & Retail loans account for around 50% of the Group’s total assets. Retail customers
typically present greater credit risk than corporates. Negative developments in the Nigerian economy
could affect retail borrowers more significantly than corporates and could result in higher levels of
loans classified by the Group as sub-standard, doubtful or lost (based on the Central Bank of
Nigeria’s Prudential Guidelines) or non-performing loans for which an impairment has been or needs
to be made and as a result, requires higher levels of provisioning.
Structural subordination and dependencies
The Issuer is a holding company and therefore many of the Group’s risks reside in its subsidiaries and
affiliated companies. The Issuer’s ability to meet its financial obligations is dependent upon the
availability of cash flows from members of the Group through dividends, inter-company loans and
other payments. Claims by the creditors of the Issuer’s subsidiaries may adversely affect the ability of
those subsidiaries to support the Issuer in fulfilling its obligations. The unavailability of cash flows from
the subsidiaries of the Issuer through dividends, inter-company loans or other payments, or claims by
the creditors of the subsidiaries of the Issuer may adversely affect the ability of those subsidiaries to
support the Issuer in fulfilling its obligations under the Notes.
21
Risks Relating to the Notes
The Notes are new securities which will not be widely distributed and for which there is currently no
active trading market. If the Notes are traded after their initial issuance, they may trade at a discount
to their initial offering price, depending upon prevailing interest rates, the market for similar securities,
general economic conditions, the Group’s results of operations and the market price of the Ordinary
Shares. Although applications have been made for the Notes to be admitted to trading on the ISM,
there is no assurance that an active trading market will develop, or that trading in the Notes will not be
suspended by the ISM. Accordingly, there is no assurance as to the development or liquidity of any
trading market for the Notes.
Suitability
Investors must determine the suitability of an investment in the Notes in light of their own
circumstances. In particular, each potential investor should:
- have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and the risks of investing in the Notes and the information contained in these Listing
Particulars or any applicable supplement;
- have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of
its particular financial situation, an investment in the Notes and the impact the Notes will have
on its overall investment portfolio;
- have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Notes, including where the currency for principal or interest payments is different from the
potential investor’s home currency;
- understand thoroughly the terms of the Notes and be familiar with the behaviour of any
relevant indices and financial markets; and
- be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for
economic, interest rate and other factors that may affect its investment and its ability to bear
the applicable risks.
A potential investor should not invest in Notes which are complex financial instruments unless it has
the expertise (either alone or with a financial adviser) to evaluate how the Notes will perform under
changing conditions, the resulting effects on the value of the Notes and the impact this investment will
have on the potential investor’s overall investment portfolio.
No Credit Ratings
A credit rating will not be assigned to the Notes on issue and no credit rating is intended to be sought
for the Notes.
22
No tax gross-up
The Issuer is not obliged to make any additional payments to the Noteholders in the event that any
payment in respect of the Notes is required to be withheld or deducted for taxation. The Issuer will not
have any right to require redemption of the Notes in the event of such withholding or deduction.
Noteholders have no shareholder rights before conversion
An investment in the Notes will not convey any voting rights, any right to receive dividends or other
distributions or any other rights with respect to any Ordinary Shares until such time, if any, as the
relevant Noteholder exercises its Conversion Right and becomes registered as the holder of Ordinary
Shares.
Risks attached to the exercise of Conversion Rights
At any point when the Notes are outstanding, depending on the performance of the Ordinary Shares,
the value of the Ordinary Shares may be substantially lower than when the Notes were initially issued
or purchased. In addition, because there will be a delay between when Conversion Rights are
exercised and when Ordinary Shares are delivered, the value of Ordinary Shares to be delivered may
vary substantially between the date on which the Conversion Rights are exercised and the date on
which such Ordinary Shares are delivered.
Limitation on exercising Conversion Rights
A Noteholder which is also a Shareholder will, subject as more fully described under the Note
Purchase Agreement, have the right to convert its Notes into Ordinary Shares. Generally, Conversion
Rights may only be exercised on or after 19 October 2019 up to the close of business on the
Business Day falling six business days prior to the Maturity Date. If a Noteholder is not an existing
Shareholder of the Issuer, such Noteholder will not be able to exercise Conversion Rights to convert
Notes into Ordinary Shares and will need to hold the Notes to maturity.
US Foreign Account Tax Compliance Act Withholding (FATCA)
FATCA may affect payment to any ultimate investor that is a financial institution that is not entitled to
receive payments free of withholding under FATCA. Investors should consult their own tax adviser to
obtain a more detailed explanation of FATCA and how FATCA may affect them.
Noteholders will bear the risk of fluctuation in the price of the Ordinary Shares
The market price of the Notes is expected to be affected by fluctuations in the market price of the
Ordinary Shares and it is impossible to predict whether the price of the Ordinary Shares will rise or
fall. Trading prices of the Ordinary Shares will be influenced by, among other things, the financial
position of the Group, results of operations and political, economic, financial and other factors. Any
decline in the market price of the Ordinary Shares may have a material adverse effect on the market
price of the Notes.
Future issues or sales of the Ordinary Shares may also significantly affect the market price of the
Notes and/or the Ordinary Shares. The future issue of Ordinary Shares by the Issuer or the
23
perception that such issues may occur may significantly affect the trading price of the Notes and/or
the Ordinary Shares. There can be no assurance that the Issuer will not issue Ordinary Shares or that
any substantial shareholder will not dispose of, encumber, or pledge its Ordinary Shares or related
securities.
The price at which the Notes may be converted into Ordinary Shares is not subject to adjustment
There is no requirement that the price at which the Notes may be converted into Ordinary Shares
should be adjusted for any corporate or other event that may affect the value of the Ordinary Shares.
Events in respect of which no adjustment is made may adversely affect the value of the Ordinary
Shares, and, therefore, adversely affect the value of the Notes.
Modification, waivers and substitution
The Note Purchase Agreement permits defined majorities of Noteholders to bind all Noteholders
including Noteholders who did not vote or who voted in a manner contrary to the majority.
Change of law
The Note Purchase Agreement is based on English law in effect as at the date of issue of the Notes.
No assurance can be given as to the impact of any possible judicial decision or change to English law
or administrative practice after the date of issue of the Notes.
Floating Rate Reset Convertible Notes and 6 month Reset of three-month LIBOR
The amount of interest payable on the Notes is set only semi-annually based on the three-month
LIBOR on the Interest Determination Date, which rate may fluctuate substantially. In the past, the
level of the three-month LIBOR has experienced significant fluctuations. Historical levels, fluctuations
and trends of the three-month LIBOR are not necessarily indicative of future levels. Any historical
upward or downward trend in the three-month LIBOR is not an indication that the three-month LIBOR
is more or less likely to increase or decrease at any time during a floating rate interest period. The
three-month LIBOR for the Notes is determined based on the rate applying on the applicable Interest
Determination Date regardless of whether the three-month LIBOR is higher or lower during the
interest period on other dates. As a result, changes in the three-month LIBOR may not result in a
comparable change in the market value of the Notes.
Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021
may adversely affect the value of the Notes.
Since April 2013, the United Kingdom Financial Conduct Authority (FCA) has regulated LIBOR, the
“benchmark” to which certain interest payments on Notes issued may be linked. In July 2017, the FCA
announced that it does not intend to continue to encourage, or use its power to compel, panel banks
to provide rate submissions for the calculation of the LIBOR benchmark beyond the end of 2021 and
that, as a result, there can be no guarantee that LIBOR will be determined after 2021 on the same
basis at present, if at all. At this time, it is not possible to predict the effect of any such changes, any
establishment of alternative reference rates or any other reforms to LIBOR that may be implemented
in the United Kingdom or elsewhere. Any such consequences could adversely affect the value of and
return on any Notes that refer to calculate interest or other payments due on the Notes.
24
Any of the international, national or other proposals for reform or the general increased regulatory
scrutiny of “benchmarks” could increase the costs and risks of administering or otherwise participating
in the setting of a “benchmark” and complying with any such regulations or requirements. Such
factors may have the effect of discouraging market participants from continuing to administer or
contribute to certain “benchmarks,” trigger changes in the rules or methodologies used in certain
“benchmarks” or lead to the discontinuance or unavailability of quotes of certain “benchmarks”.
To the extent that LIBOR may be discontinued or no longer quoted, the applicable base rate will be
determined using the alternative methods as set out in the Note Purchase Agreement (including but
not limited to the determination of a rate deemed to be a fair substitute or replacement rate as advised
by a financial adviser). Any such alternative method may result in interest payments that are lower
than or that do not otherwise correlate over time with the payments that would have been made on
those Notes if LIBOR was available in its current form. Further, the same costs and risks that may
lead to the discontinuation or unavailability of LIBOR may make one or more of the alternative
methods impossible or impracticable to determine. Any of the foregoing may have an adverse effect
on the value of such Notes.
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DOCUMENTS INCORPORATED BY REFERENCE
The following financial information is incorporated by reference in these Listing Particulars:
1. The audited consolidated financial statements of the Group for the financial years ended 31
December 2016 and 2015, together with the audit report for the years ended 31 December
2016 and 2015 from the Issuer’s annual reports for the financial years ended 31 December
2016 and 2015; and
2. The audited interim consolidated financial statements of the Group submitted to the NSE as of
and for the six months ended 30 June 2017.
Such documents shall be deemed to be incorporated in, and form part of, these Listing Particulars,
except that any statement contained in a document deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the purpose of these Listing Particulars to the
extent that a statement contained herein modifies or supersedes such earlier statement (whether
expressly, by implication or otherwise). Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of these Listing Particulars.
Any documents themselves incorporated by reference in the documents incorporated by reference in
these Listing Particulars shall not form part of these Listing Particulars. The parts of the above-
mentioned documents which are not incorporated by reference into these Listing Particulars are either
not relevant for investors or covered elsewhere in these Listing Particulars.
Copies of documents incorporated by reference in these Listing Particulars may be obtained (without
charge) from the registered office of the Issuer or from the Issuer’s website at
https://www.ecobank.com/group/investor-relations/key-figures/performance. Except for the documents
referred to herein as being incorporated by reference, none of the information contained on this
website shall form part of these Listing Particulars.
For further information on how copies of these financial statements can be obtained, see “General
Information – Documents Available for Inspection”.
26
USE OF PROCEEDS
The Issuer will use the net proceeds of the issue of the Notes to refinance existing obligations thereby
increasing the tenor of borrowings and for its general corporate purposes.
27
DESCRIPTION OF THE ISSUER AND THE GROUP
History and Incorporation
The Issuer, a public limited liability company, was established as a bank holding company in 1985.
In 1985 the Issuer was granted the status of an international organisation with the rights and
privileges necessary for it to operate as a regional institution, including the status of a non-resident
financial institution. The Issuer commenced operations with its first subsidiary in Togo in March 1988.
Today, the Group is a full-service regional banking institution employing over 20,000 staff in over
1,200 branches and offices in 36 countries across Africa.
The Issuer has two specialised subsidiaries: Ecobank Development Corporation (“EDC”) and
eProcess International (“eProcess”). EDC was incorporated to develop the Issuer’s investment
banking and advisory businesses throughout the countries where the Issuer operates. EDC operates
brokerage houses on the GSE, NSE, BRVM, the Douala Stock Exchange in Cameroon and the
Bourse des Valeurs Mobilières de l’Afrique Centrale (BVMAC), the regional exchange in Gabon.
eProcess manages the Group’s information technology function with a view to centralising the
Group’s middle and back office operations to improve efficiency, service standards and reduce costs.
Furthermore, the Issuer operates a pan-African research power house, dedicated to providing the
highest quality research for the Issuer’s clients in order to help them navigate the complex African
marketplace. Its team of seasoned analysts based across the Issuer’s 36-country footprint draws on
its extensive local knowledge to provide insights for clients and identify investment opportunities. Its
focus is on Middle Africa – the region between North Africa and the Rand Zone, which has the richest
potential for growth but is poorly understood. Ecobank Research produces regular market updates,
briefing notes and detailed studies on the region’s macroeconomics, currencies, fixed income,
equities, commodities and trade.
Business Objectives and Operations
The Issuer is a full-service bank providing a broad range of products and services to governments,
financial institutions, multinationals, international organisations, medium, small and micro businesses
and individuals. The Issuer is listed on the GSE, NSE and BRVM.
The Group has adopted International Financial Reporting Standards (“IFRS”) and its financial
statements are reported in U.S. dollars.
The Group operates as “One Bank” with a common brand and common standards, policies and
processes, which means that customers get a consistent and reliable service across its network of
branches, offices and alliance locations.
Through the Ecobank Foundation, the Issuer supports charitable projects relating to women, children,
health and culture. The Issuer invests substantially in developing African talent and is rolling out
microfinance units in Ghana, Sierra Leone and Nigeria.
28
Business Segments
Corporate and Investment Banking
The Group’s corporate and investment banking operations offer relevant financial solutions to global
and regional corporates, public corporates, financial institutions and international organisations. The
Group also leverages technology to assist clients. Its offerings include the following services:
Transaction Banking; Fixed Income Currencies and Commodities; Investment Banking; Security,
Wealth and Asset Management; Cards, Loans and Liquidity. The bank’s Treasury and Research
department supports the corporate and investment banking division.
Commercial Banking
The commercial banking division provides commercial banking services to large and medium sized
corporates and small and medium enterprises, as well as the public sector.
Consumer Banking
The Group also has a consumer banking divisions which provides financial products and services to
individual customers.
Organisational Structure
The Issuer acts as the holding company of the Group. The Issuer has the following significant direct
and indirect subsidiary undertakings.
Name Country of
Incorporation
Proportion of
ownership
interest
Principal activity
Ecobank Cameroon Cameroon 80% Banking
Ecobank Chad Chad 74% Banking
Ecobank Sao Tomé Sao Tomé and
Principe
99% Banking
Ecobank Central Africa Central Africa 75% Banking
Ecobank Congo
Brazzaville
Congo Brazzaville 89% Banking
Ecobank Gabon Gabon 75% Banking
Ecobank Guinea
Equatoriale
Equatorial Guinea 60% Banking
29
Ecobank Benin Benin 79% Banking
Ecobank Burkina Faso Burkina Faso 85% Banking
Ecobank Côte d’Ivoire Côte d’Ivoire 94% Banking
Ecobank Mali Mali 93% Banking
Ecobank Niger Niger 100% Banking
Ecobank Sénégal Sénégal 80% Banking
Ecobank Togo Togo 82% Banking
Ecobank Guinea Bissau Guinea Bissau 100% Banking
Ecobank Cape Verde Cape Verde 99% Banking
Ecobank Ghana Ghana 69% Banking
Ecobank Guinea Guinea 83% Banking
Ecobank Liberia Ecobank 100% Banking
Ecobank Sierra Leone Sierra Leone 100% Banking
Ecobank Gambia Gambia 97% Banking
Ecobank Rwanda Rwanda 94% Banking
Ecobank Tanzania Tanzania 100% Banking
Ecobank Kenya Kenya 100% Banking
Ecobank Burundi Burundi 75% Banking
Ecobank Uganda Uganda 100% Banking
Ecobank South Sudan South Sudan 100% Banking
Ecobank Nigeria Nigeria 100% Banking
Ecobank Malawi Malawi 96% Banking
Ecobank Congo RDC Republic of the
Congo
100% Banking
30
Ecobank Zambia Zambia 100% Banking
Ecobank Zimbabwe Zimbabwe 99% Banking
Ecobank Mozambique Mozambique 96% Banking
SOFIPE Burkina Burkina Faso 85% SME financing
Ecobank Micro Finance
Sierra Leone
Sierra Leone 100% Micro finance
Ecobank Development
Holding Corporation
Togo 91% Investment banking and asset
management
EKE Property Limited
Kenya
Kenya 100% Property development
Treasury Bond Protected
Investment Company
Mauritius 100% Asset Management
ECB One Mauritius 100% Aircraft leasing
FCP Obligataire Côte d’Ivoire 80% Asset Management
eProcess international Togo 100% Technology Services
EBI SA (France) France 100% Banking
Bewcastle Nigeria 100% Property development
Administrative, Management and Supervisory Bodies
The Issuer’s registered office is located at 2365 Boulevard du Mono, Lomé, Togo.
The Directors of the Issuer are:
Name Title and principal activities outside the Group (if any)
Emmanuel Ikazoboh Chairman and Independent Non-Executive Director
Board representative of the International Institute for Sustainable Development
in Canada (Chairman of Audit and Risk Committee)
Ade Ayeyemi Group Chief Executive Officer and Executive Director
Abdulla M. Al Khalifa Non-Executive Director
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Member of Finance & Regulatory Requirements Committee
Member of Risk Committee
Executive General Manager and Chief Business Officer of Qatar National
Bank Group
Executive Director of QNB Capital, Qatar
Executive Director of ANB Al Ahli, Eqypt
Executive Director of Housing Bank Trade & Finance, Jordan
Non-Executive Director of QNB Finansbank, Turkey
Alain F. Nkontchou Independent Non-Executive Director
Chairman of Nomination & Remuneration Committee
Member of Audit Committee
Managing Partner and Co-Founder, Enko Capital Management
Dolika E.S. Banda Independent Non-Executive Director
Chairperson of Social, Ethics & Reputation Committee
Member of Risk Committee
Chief Executive Officer of African Risk Capacity Insurance Company Limited
Non-Executive Director of Harith General Partners
Non-Executive Director of DFID/UK AID’s Financial Sector Deepening Africa
and Financial Sector Deepening Zambia
Chair of Focus Investment Group
Bashir M.Ifo Non-Executive Director
Member of Nomination & Remuneration Committee
Member of Governance Committee
President ECOWAS Bank for Investment and Development
32
Non-Executive Director of Asky Airlines
Tei Mante Independent Non-Executive Director
Chairman of Audit & Compliance Committee
Member of Governance Committee
Independent member of the Investment Committee of the West
Africa Emerging Markets Growth Fund
Dr Daniel M. Matjila Non-Executive Director
Member of Finance & Regulatory Requirements Committee
Member of Risk Committee
Chief Executive Officer and Executive Director for the Public Investment
Corporation
Mfundo Clement Nkuhlu Non-Executive Director
Member of Nomination & Remuneration Committee
Member of Finance & Regulatory Requirements Committee
Member of Social, Reputation & Ethics Committee
Chief Operating Officer and Executive Director of Nedbank Limited and
Nedbank Group Limited
Dr Catherine W. Ngahu Independent Non-Executive Director
Member of Nomination & Remuneration Committee
Member of Social, Ethics & Reputation Committee
Chair of Universal Service Advisory Council of the Communication Authority of
Kenya
Chair of Uchumi Supermarkets Limited
Member of board of AAR Insurance
33
Member of board of Eveready EA Limited
Greg Davis Group Executive Director, Chief Financial Officer
Brian Kennedy Non-Executive Director
Group Managing Executive: Nedbank Corporate and Investment Banking
David O’Sullivan Non-Executive Director
Director of the QNB Global Funds ICAV
The members of Executive Management are Mr. Ade Ayeyemi , Greg Davis and the following persons:
Julie Essiam Group Executive, HR & Corporate Affairs
Eddy Ogbobu Group Executive, Operations & Technology
Gary Taylor Group Head, Credit Risk
Madibinet Cisse Group Head, Legal & Company Secretary
Moustapha Fall Group Head, Internal Audit
Amin Manekia Group Executive, Corporate and Investment Bank
Patrick Akinwuntan Group Executive, Consumer Banking
Laurence do Rego Group Executive, Commercial Banking
34
Major Shareholders
As at 30 June 2017, the major shareholders of the Issuer are as shown below. These holdings
include, where applicable, the aggregate of investment management clients’ interests within the
respective asset management companies and may have since changed without triggering a further
notification.
Number of Shares held %
Nedbank 5,249,014,550 21.2
Qatar National Bank 4,970,904,524 20.18
IFC and IFC Funds 3,487,337,828 14.1
PIC (GEPF) 3,333,333,333 13.5
SSNIT 955,688,972 3.9
For further information on the Issuer’s historical financial information, please see “Documents
Incorporated by Reference” above.
35
SUBSCRIPTION AND SALE
Pursuant to the Note Purchase Agreement the Purchasers have agreed with the Issuer, subject to the
satisfaction of certain conditions, to purchase the Notes at the issue price of 100% of their principal
amount.
United States
The Notes have not been and will not be registered under the Securities Act and may not be offered,
sold or delivered within the United States or to, or for the account or benefit of U.S. persons except in
certain transactions exempt from the registration requirements of the Securities Act. Terms used in
this paragraph have the meanings given to them by Regulation S under the Securities Act.
The Notes are subject to United States tax law requirements and may not be offered, sold or
delivered within the United States or its possessions or to a U.S. person, except in certain
transactions permitted by United States Treasury regulations. Terms used in this paragraph have the
meanings given to them by the United States Internal Revenue Code of 1986 and regulations
thereunder.
United Kingdom
In connection with the Notes, there will not be communicated or caused to be communicated any
invitation or inducement to engage in investment activity (within the meaning of section 21 of the
FSMA) in connection with the issue or sale of any Notes except in circumstances in which section
21(1) of the FSMA does not apply to the Issuer; and (ii) all applicable provisions of the FSMA with
respect to anything done in relation to such Notes in, from or otherwise involving the UK will need to
be complied with.
These Listing Particulars are only being distributed to and is only directed at (i) persons who are
outside the United Kingdom or (ii) to investment professional failing within Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the
”Order”) or (iii) high net worth entities and other persons to whom it may lawfully be communication,
falling within Article 49(2)(a) to (d) of the Order (and such persons together being referred to as
“relevant persons”). The Notes are only available to, and any invitation, offer or agreement to
subscribe, purchase or otherwise acquire such Notes will be engaged in only with, relevant persons.
A person who is not a relevant person should not act or rely on these Listing Particulars or any of its
contents.
European Economic Area
These Listing Particulars have not been reviewed or approved by the Financial Conduct Authority as
competent authority in the United Kingdom, nor has it been reviewed or approved by any competent
authority in any other member state of the European Economic Area and does not constitute a
Prospectus for the purposes of the Prospectus Directive. No approval, filing or registration has been
or will be made to offer the Notes to the public in any jurisdiction.
These Listing Particulars have been prepared on the basis that any offer of Notes in any EEA
Member State that has implemented the Prospectus Directive (a “Relevant Member State”) will be
36
made pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant
Member State, from the requirement to publish a prospectus for offers of Notes. Accordingly, any
person making or intending to make an offer in that Relevant Member State of Notes which are the
subject of an offering contemplated in these Listing Particulars may only do so in circumstances in
which no obligation rises for the Issuer to publish a prospectus pursuant to Article 3 of the Prospectus
Directive, in each case, in relation to such offer. Neither the Issuer nor the Purchasers have
authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an
obligation arises for the Issuer to publish or supplement a prospectus for such offer. In these Listing
Particulars, the expression “Prospectus Directive” means Directive 2003/71/EC (as amended,
including by Directive 2010/73/EU), and includes any relevant implementing measure in the Relevant
Member State.
Ghana
The offer for sale or selling of the Notes to the public in Ghana, and the distribution of these Listing
Particulars or any information related thereto to the public in Ghana, is restricted by the Securities
Industry Act of Ghana, 2016 (Act 929), the Securities and Exchange Commission Regulations of
Ghana, 2003 (LI 1728), the Foreign Exchange Act of Ghana, 2016 (Act 723) (“FEA”) and the
Operational Guidelines for the FEA issued by the Bank of Ghana in March 2007 under Notice No.
BG/GOV/SEC/2007/4. Persons who come into possession of these Listing Particulars in Ghana are
required to inform themselves about, and to observe, any such restriction. For these purposes, these
Listing Particulars do not constitute an offer to the public in Ghana and may not be used for the
purpose of an offer or solicitation to the public by any one in Ghana.
Nigeria
These Listing Particulars and the Notes have not been, and will not be, registered with the Nigerian
Securities and Exchange Commission, or under the Nigerian Investment Securities Act No. 29 of
2007 ("ISA"). Furthermore, neither these Listing Particulars nor any other offering material related to
the Notes will be distributed or utilised in connection with any offering or solicitation of an offer to the
public within Nigeria, and the Notes will not be offered or sold within Nigeria or to, or for the account
or benefit of the Nigerian public.
UEMOA
These Listing Particulars and the Notes have not and will not be registered with the applicable
regulators in the UEMOA. Accordingly, the Notes will not be offered or sold in the UEMOA.
General
Save for having obtained approval of this document by the London Stock Exchange pursuant to the
rules of the ISM, no action has been or will be taken by the Issuer or any of the Purchasers or any
other person that would permit a public offering of the Notes or possession or distribution of this
document or other offering material relating to the Notes in the United Kingdom or in any jurisdiction
where, or in any circumstances in which, action for those purposes is required. This document does
not constitute an offer and may not be used for the purposes of any offer or solicitation in or from any
jurisdiction where such an offer or solicitation is not authorised or would be unlawful.
37
GENERAL INFORMATION
Authorisation
1. The creation and issue of the Notes was authorised by resolutions of the board of directors of the Issuer on 18 January 2017.
ISIN and SEDOL
2. The ISIN for the Notes is CI0000002408 and the SEDOL is BF1G818. The Notes are in definitive registered form only, and will not be cleared or settled in any clearing systems (including Euroclear Bank SA/NV and Clearstream Banking, S.A.).
Legal and Arbitration Proceedings
3. There are no governmental, legal or arbitration proceedings (including any proceedings which are pending or threatened) of which the Issuer is aware in the 12 months preceding the date of this document which may have or have in such period had a significant effect on the financial position or profitability of the Issuer or of the Group.
Significant/Material Change
4. There has been no significant change in the financial or trading position of the Issuer and/or the Group since 30 June 2017 and no material adverse change in the prospects of the Issuer and/or the Group since 31 December 2016.
Documents Available for Inspection
5. So long as the Notes remain outstanding, physical copies of the following documents (together with English translations thereof) may be inspected by Noteholders during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the offices of the Issuer at 2365, Boulevard du Mono, Lomé Togo or at EBI SA, Representative Office, 2
ndFloor, 20 Old Broad Street, London, EC2N 1DP, United Kingdom:
(a) the constitutive documents of the Issuer;
(b) the form of the Note Purchase Agreement; and
(c) the annual report and financial statements of the Group for the year ended 31 December 2016 and the half yearly report of the Group for the six months ended 30 June 2017.
Statutory Auditors
6. Akintola Williams Deloitte, Nigeria, and Grant Thornton, Côte d’Ivoire, Joint Auditors of the Issuer, who are registered to carry out audit work by ICAEW in Nigeria and by ICAEW in Côte d’Ivoire respectively, have audited and rendered an unqualified audit report on, in accordance with IFRS issued by the International Accounting Standards Board (IASB), the accounts of the Issuer, which were prepared in accordance with IFRS and IFRS Interpretations Committee, for the years ended 31 December 2016 and 31 December 2015.
38
Information on the Ordinary Shares issuable upon conversion of the Notes
7. Information on the Ordinary Shares issuable upon conversion of the Notes, as well as information on the past and future performance of the Ordinary Shares and their volatility can be obtained at the following websites:
(a) BRVM – http://www.brvm.org;
(b) GSE – https://www.gse.com.gh; and
(c) NSE – http://www.nse.com.ng/.
Description of the markets on which the Ordinary Shares issuable upon conversion of the Notes are traded
8. The GSE was established in July 1989 as a private company limited by guarantee under the Companies Code of 1963. It was given recognition as an authorised stock exchange under the Stock Exchange Act of 1971 (Act 384) in 1990. The GSE changed its status to a public company limited by guarantee in 1994, and is the main securities market in Ghana. The GSE is regulated by the Securities and Exchange Commission. Price information of securities can be found published on the GSE’s website. An indication of the trading volumes and the frequency with which prices of the Ordinary Shares issuable upon conversion of the Notes can be obtained at: https://www.gse.com.gh.
9. The NSE is a registered company limited by guarantee founded in 1960 and it is licensed under the Investments and Securities Act and is regulated by the Securities and Exchange Commission of Nigeria. The NSE is the main securities market in Nigeria. Price information of securities can be found published on the NSE’s website. An indication of the trading volumes and the frequency with which prices of the Ordinary Shares issuable upon conversion of the Notes can be obtained at http://www.nse.com.ng/.
10. The BRVM was established in December 1996 as a private limited company with a community public service mission following a decision by the council of ministers of UEMOA in 1993 to create a financial market for the region. The BRVM is the regional stock exchange for the eight countries of the UEMOA region: Benin, Burkina Faso, Cote d’Ivoire, Guinee-Bissau, Mali, Niger, Senegal and Togo. It has its headquarters based in Abidjan and local antennas in each of the UEMOA countries. The BRVM is regulated by the Conseil Regional de l’Epargne Publique et des Marchés Financiers. Price information of securities can be found published on the BRVM’s website. An indication of the trading volumes and the frequency with which prices of the Ordinary Shares issuable upon conversion of the Notes can be obtained at: https://www.brvm.org.
39
ISSUER
Ecobank Transnational Incorporated
2365 Boulevard du Mono,
Lomé
Togo
To the Issuer as to English law: To the Issuer as to Nigerian law:
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
Udo Udoma & Belo-Osagie
St. Nicholas House (10th & 13th Floors)
Catholic Mission Street
Lagos
Nigeria
To the Issuer as to Ghanaian law: To the Issuer as to UEMOA law:
Bentsi-Enchill, Letsa & Ankomah
4 Momotse Avenue, Adabraka - Accra
P. O. Box GP 1632
Accra
Ghana
Bile-Aka, Brizoua-Bi & Associés
République de Côte d'Ivoire
7 Boulevard Latrille, Abidjan-Cocody
25 BP 945 Abidjan 25
Côte d’Ivoire
AUDITORS TO THE ISSUER
Akintola Williams Deloitte, Nigeria
Civic Towers
Plot GA 1, Ozumba Mbadiwe Avenue
Victoria Island, Lagos
Nigeria
Grant Thornton, Côte d’Ivoire
Rue du commerce, Immeuble Nabil, 1er étage
BP 12721 Abidjan
Côte d'Ivoire
TRANSACTION ADVISORS TO THE ISSUER
Ecobank Development Corporation
2365, Boulevard du Mono, BP 3261
Lomé
Togo