African Bank restructure sets workout precedent

Author: Tom Young | Published: 15 Mar 2016

The restructuring of African Bank has successfully imported the good bank-bad bank structure to South Africa. But domestic idiosyncrasies meant counsel had to overlay international liability management techniques with a complex and slow curatorship process to save the troubled lender. 

The restructuring required both an amendment to the country’s Banks Act, and also contributed to the consultation on a new resolution regime for institutions in the country.

Such changes are necessary to speed up what was a taxing process, according to lawyers on the deal. "Trying to preserve the business and the value in it, rather than winding the whole thing down, can be a very cumbersome process. It’s not something you get done in a resolution weekend," said Richard Levy, partner at Linklaters in London who advised the curator on the restructuring.

KEY TAKEAWAYS

African Bank is close to completing the creation of the continent’s first...