28th Mar 2013 16:00
INFORMATION STATEMENT
March 28, 2013
Dear Global Depositary Receipt Holder:
Reference is hereby made to the Amended and Restated Deposit Agreement dated May 10, 2010 (as may be amended from time to time, the "Deposit Agreement") between Bank Audi s.a.l. - Audi Saradar Group (the "Bank") and Deutsche Bank Trust Company Americas, in its capacity as depositary (the "Depositary"), relating to Global Depositary Receipts issued in respect of common shares of the Bank (the "GDRs"), each GDR representing one common share, nominal value L.L. 1,254 per common share (the "Common Shares"). Capitalized terms used herein without otherwise being defined shall have the respective meanings assigned thereto in the Deposit Agreement.
The Depositary, as the shareholder of record of Common Shares evidenced by GDRs, has received notice of the Extraordinary General Meeting of the Shareholders of the Bank to be held on April 15, 2013 (the "General Meeting"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Meeting. References in this Information Statement (this "Information Statement") to the "Holder" of any GDR shall mean the person registered as a holder on the books of the Depositary. In accordance with Clause 13 of the Deposit Agreement and Condition 23 of the GDRs, a copy of such notice and agenda is being sent hereby to each person who is a Holder on March 27, 2013, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to April 12, 2013, being the corresponding record date set by the Bank in respect of the General Meeting).
As set forth in such notice, at the General Meeting, shareholders of the Bank, including the Depositary, will be asked to consider and vote upon the following agenda:
1. The Cancellation of the series "D" Preferred Shares and increase of the Bank's capital in order to round the nominal value of each individual share up to LL1,299;
2. The Amendment of the Bank's By-Laws, including, in particular articles 6 and 8, in order to reflect the foregoing;
3. The increase of the Bank's capital through the issuance of two series of Preferred Shares (pursuant to Lebanese Law No 308/2001);
4. The listing of such newly-issued Preferred Shares on the Beirut Stock Exchange;
5. The amendment of the Bank's By-Laws, including, in particular, articles 6 and 8 thereof, in order to reflect the actions described in items 3 and 4 above ;
6. The submission of the actions described in items 1-5 inclusive for approval by the Central Bank of Lebanon acting through its Central Council; and
7. The granting to the Chairman of the Board of Directors and to the Group Chief Executive Officer (acting severally) of the necessary powers to seek required approvals, to set deadlines and to perform all other acts and procedures in pursuit of all of the foregoing resolutions.
Each Holder is hereby requested to return to the Depositary voting instructions, as provided in this Information Statement, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in such agenda.
After careful consideration, the Board of Directors of the Bank (the "Board of Directors") recommends a vote in favour of each such resolution.
Yours very truly,
Raymond Audi
Chairman - General Manager
Bank Audi s.a.l. - Audi Saradar Group
INFORMATION STATEMENT
Table of Contents
Page
Available Information.......................................................................................................................................................... 3
Voting Rights of Holders..................................................................................................................................................... 3
Summary Background Information.................................................................................................................................... 3
Voting Instructions.............................................................................................................................................................. 8
Information regarding Bank Audi s.a.l. - Audi Saradar Group...................................................................................... 9
AVAILABLE INFORMATION
No person has been authorized to give any information or to make any representation other than those contained in this Information Statement, and, if given or made, such information or representation must not be relied upon as having been authorized by the Bank. No delivery of this Information Statement nor any offer or distribution of any securities to which this Information Statement relates shall, under any circumstances, create any implication that there has been no change in the affairs of the Bank since the date of this Information Statement or that any information contained or referred to herein is correct as of any time subsequent to the date as of which it is given. This Information Statement does not constitute the solicitation of a proxy to or from any person in any jurisdiction to or from whom it is unlawful to make such offer or solicitation within such jurisdiction.
VOTING RIGHTS OF HOLDERS
In accordance with Condition 12 of the GDRs, the Depositary is seeking voting instructions from the Holders in order to exercise or cause to be exercised the voting rights in respect of the Deposited Shares as directed by such voting instructions to the extent permitted by Lebanese Law.
Common Shares which have been withdrawn from the deposit facility under the Deposit Agreement and transferred on the Bank's register of members to a person other than the Depositary or its nominee may be voted by the registered owner thereof; however, Holders may not receive sufficient advance notice of the General Meeting to enable them to withdraw Deposited Shares and vote at the General Meeting.
SUMMARY BACKGROUND INFORMATION
I. Redemption and Cancellation of the Series "D" Preferred Shares and Increase of the Bank's Capital
In this section, unless indicated otherwise, information relating to number of shares and to their price and their nominal value, as the case may be, has been modified to reflect the 2010 10-to-1 stock split of all the Bank's Common Shares and Preferred Shares, carried out pursuant to the shareholders resolution of March 2, 2010 ("the 2010 Stock Split").
In 2005, Bank Audi issued 12,500,000 Redeemable Series "D" Preferred Shares (1,250,000 before giving effect to the 2010 Stock Split) at US$ 10 per Series "D" Preferred Share (US$ 100 before giving effect to the 2010 Stock Split) carrying annual distribution rights of U.S.$0.775 (US$ 7.75 before giving effect to the 2010 Stock Split) per share. The terms of the Series "D" Preferred Shares provided, amongst other things, that the Bank may, at its option and subject to certain conditions, redeem and cancel all of the Series "D" Preferred Shares within five business days following the date of the Annual Ordinary General Assembly at which the 2012 audited financial statements of the Company are approved, in its sole discretion at a price of US$ 10 (US$ 100 before giving effect to the 2010 Stock Split) per share plus any declared but unpaid Series "D" Distributions (as defined in the terms of the Series "D" Preferred Shares).
In its meeting held on November 14, 2012, the Board of Directors of the Bank resolved to redeem and cancel the Series "D" Preferred Shares. The Bank has confirmed that all conditions precedent to the redemption of the Series D Preferred Shares have been fulfilled, including that the Bank is in compliance with all relevant applicable ratios and regulations of the Central Bank of Lebanon , as well as the availability of sufficient free reserves for the purpose of such redemption. Such redemption is expected to be completed on April 10, 2013, following the Annual Ordinary General Assembly expected to meet on April 8, 2013.
Pursuant to the terms of the Series "D" Preferred Shares, upon the redemption of the Series "D" Preferred Shares, the shares shall be cancelled and the nominal value of each of the remaining shares constituting the outstanding share capital of the Bank shall be adjusted to reflect such cancellation. This adjustment of the nominal value of each remaining share would result in the increase of the nominal value of each of the remaining shares constituting the Bank's outstanding share capital from L.L. 1,254 to L.L. 1,298.46819. In order to round the nominal value of each individual share up to L.L. 1,299, for practical purposes, the Board of Directors has resolved, subject to the approval of the General Assembly and of the Central Bank of Lebanon, to increase the capital of the Bank by L.L. 187,464,180 through the incorporation of free reserves.
II. Issuance of Series "G" and "H" Preferred Shares
In its meeting held on March 21, 2013, the Board of Directors, pursuant to a recommendation of its Group Executive Committee, determined that it would be beneficial to proceed with the simultaneous issue of two new series of preferred shares to increase the Bank's share capital. In making such determination, the Board of Directors considered the structure of the Bank's current share capital, the Bank's expected growth and the current advantageous market conditions for the issuances of new preferred shares. The Board of Directors noted that, if the issuances of new preferred shares are approved, the net proceeds thereof will be used for general funding purposes (including, but not limited to, strengthening the capital structure and external growth). Accordingly, the Board of Directors resolved to propose to the General Meeting to approve the issuances of two new series of preferred shares, to be captioned Series "G" Preferred Shares (the "Series G Preferred Shares") and Series "H" Preferred Shares (the "Series H Preferred Shares"), on the indicative terms and conditions summarized below:
Indicative terms and conditions applicable, respectively, to the Series G Preferred Shares and to the Series H Preferred Shares:
Series G Preferred Shares
Type | Non-Cumulative Redeemable Preferred Shares, each with a nominal value of LL 1,299 which are expected to constitute Tier 1 capital. |
Issue Size | U.S.$150,000,000. |
Maturity/Tenor | Perpetual, subject to call option. See "Call Option", below. |
Issue Price | U.S.$100.00 per share, of which the equivalent of LL 1,299 shall represent the nominal value per share, with the balance, which the Bank intends to maintain in U.S. Dollars, consisting of issue premium.
It is expected that the Issue Price, consisting of the nominal value and the premium in excess thereof, will constitute Tier 1 capital. Existing holders of Preferred Shares and prospective investors should note that the issue premium has been determined by the Bank in its discretion.
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Annual Distributions | Subject to certain conditions, distributions ("Distributions") shall be payable to holders of Series G Preferred Shares, in U.S. Dollars, on account of fiscal year 2013, at the rate of U.S.$4.00 per Series G Preferred Share (representing a dividend yield of 6% per annum pro rated to approximately reflect the remaining period from the Issue Date to year-end 2013) and, on account of each fiscal year thereafter, at the rate of U.S.$6.00 per Series G Preferred Share (representing a dividend yield of 6% per annum), subject to adjustment in the event of any stock split or combination affecting the share capital of the Bank (but not upon any other event, including the issuance of any new shares below market value, stock dividends or a recapitalization of the Bank's share capital).
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Distributions Not Cumulative | The right to Distributions in respect of the Series G Preferred Shares shall not be cumulative. If Distributions for any year are not declared and paid for any reason, holders of Series G Preferred Shares will not be entitled to receive such Distributions whether or not funds are or subsequently become available. |
Restrictions on Payment of Dividends upon Common Shares | So long as any Series G Preferred Shares shall be outstanding, the Bank shall not declare or pay any dividend or other distribution upon its Common Shares during any fiscal year until full annual Distributions in respect of the Series G Preferred Shares (and any other outstanding preference shares of the Bank ranking pari passu with the Series G Preferred Shares in respect of distributions, including, as at the date hereof, the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares, as well as any outstanding Series H Preferred Shares) shall have been paid or declared and set apart in respect of such fiscal year. |
Voting rights | Except in limited circumstances and reflecting applicable Lebanese law, the holders of Series G Preferred Shares shall not have voting rights. |
Ranking | The Series G Preferred Shares shall rank pari passu with the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares, as well as any outstanding Series H Preferred Shares, and with any future series of preference shares that may be issued by the Bank and (ii) senior to the Common Shares in respect of the right to receive distributions of assets payable in respect of the net profits of the Bank and the right to receive payments out of the assets of the Bank upon any voluntary or involuntary liquidation or winding up of the Bank. |
Call Option | Subject to certain conditions, the Bank may, at its option, redeem and cancel the Series G Preferred Shares then outstanding, in whole or in part (but not less than 20 per cent of the aggregate issue size), (x) at any time after the Issue Date, upon the occurrence of a Regulatory Event (as defined in the terms of the Series G Preferred Shares); or (y) within 60 days following the later of (a) the date of the Ordinary General Meeting (or any other shareholders' meeting) at which the annual audited financial statements of the Bank for the year ended 31 December 2017 are approved or (b) the fifth anniversary of the date of the EGM held to confirm the issuance of the Series G Preferred Shares, and annually thereafter, at a redemption price equal to U.S.$100.00 per Series G Preferred Share, plus any declared but unpaid Distributions. |
Listing | The Bank intends to list the Series G Preferred Shares on the Beirut Stock Exchange. |
Series H Preferred Shares
Type | Non-Cumulative Redeemable Preferred Shares, each with a nominal value of LL 1,299 which are expected to constitute Tier 1 capital. |
Issue Size | U.S.$75,000,000. |
Maturity/Tenor | Perpetual, subject to call option. See "Call Option", below. |
Issue Price | U.S.$100.00 per share, of which the equivalent of LL 1,299 shall represent the nominal value per share, with the balance, which the Bank intends to maintain in U.S. Dollars, consisting of issue premium.
It is expected that the Issue Price, consisting of the nominal value and the premium in excess thereof, will constitute Tier 1 capital. Existing holders of Preferred Shares and prospective investors should note that the issue premium has been determined by the Bank in its discretion.
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Annual Distributions | Subject to certain conditions, distributions ("Distributions") shall be payable to holders of Series H Preferred Shares, in U.S. Dollars, on account of fiscal year 2013, at the rate of U.S.$4.50 per Series H Preferred Share (representing a dividend yield of 6.5% per annum pro rated to approximately reflect the remaining period from the Issue Date to year-end 2013) and, on account of each fiscal year thereafter, at the rate of U.S.$6.50 per Series H Preferred Share (representing a dividend yield of 6.5% per annum), subject to adjustment in the event of any stock split or combination affecting the share capital of the Bank (but not upon any other event, including the issuance of any new shares below market value, stock dividends or a recapitalization of the Bank's share capital). |
Distributions Not Cumulative | The right to Distributions in respect of the Series H Preferred Shares shall not be cumulative. If Distributions for any year are not declared and paid for any reason, holders of Series H Preferred Shares will not be entitled to receive such Distributions whether or not funds are or subsequently become available |
Restrictions on Payment of Dividends upon Common Shares | So long as any Series H Preferred Shares shall be outstanding, the Bank shall not declare or pay any dividend or other distribution upon its Common Shares during any fiscal year until full annual Distributions in respect of the Series H Preferred Shares (and any other outstanding preference shares of the Bank ranking pari passu with the Series H Preferred Shares in respect of distributions, including, as at the date hereof, the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares, as well as any outstanding Series G Preferred Shares) shall have been paid or declared and set apart in respect of such fiscal year. |
Voting rights | Except in limited circumstances and reflecting applicable Lebanese law, the holders of Series H Preferred Shares shall not have voting rights.
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Ranking | The Series H Preferred Shares shall rank pari passu with the Series D Preferred Shares, the Series E Preferred Shares and the Series F Preferred Shares, as well as any outstanding Series G Preferred Shares, and with any future series of preference shares that may be issued by the Bank and (ii) senior to the Common Shares in respect of the right to receive distributions of assets payable in respect of the net profits of the Bank and the right to receive payments out of the assets of the Bank upon any voluntary or involuntary liquidation or winding up of the Bank. |
Call Option | Subject to certain conditions, the Bank may, at its option, redeem and cancel the Series H Preferred Shares then outstanding, in whole or in part (but not less than 20 per cent of the aggregate issue size), (x) at any time after the Issue Date, upon the occurrence of a Regulatory Event (as defined in the terms of the Series H Preferred Shares); or (y) within 60 days following the date of the Ordinary General Meeting (or any other shareholders' meeting) at which the annual audited financial statements of the Bank for the year ended 31 December 2019 are approved, and annually thereafter, at a redemption price equal to U.S.$100.00 per Series H Preferred Share, plus any declared but unpaid Distributions. |
Listing | The Bank intends to list the Series H Preferred Shares on the Beirut Stock Exchange. |
The disclosure above is only an indicative summary of certain terms and conditions proposed to be applicable to the contemplated Series G Preferred Shares and Series H Preferred Shares. Nothing contained in this Information Statement shall constitute an offer of, or an invitation to subscribe for or purchase, any Series G Preferred Shares or any Series H Preferred Shares.
The issuance of the Series G Preferred Shares and the Series H Preferred Shares remains subject to the approval of the Central Bank of Lebanon and the Bank's shareholders.
III. Amendments to the By-Laws
Pursuant to applicable regulations, the approval of the actions described under sections I and II above necessitates resulting amendments to the Bank's By-Laws.
Accordingly, in its meeting held on March 21, 2013, the Board of Directors resolved to propose to the General Assembly to approve, upon its approval of each or all of the actions described above, the amendment of Articles 6 and 8 of the By-Laws to reflect the matters specified under sections I and II above.
IV. Grant of Power
In its meeting held on March 21, 2013, the Board of Directors noted that the actions described under sections I and II above require the obtaining of certain authorizations and the completion of certain other acts. Accordingly, the Board of Directors resolved to propose to the General Assembly to approve, upon its approval of the actions described under sections I to III above, including its approval of related amendments to the Bank's By-Laws, to empower the Chairman of the Board of Directors and the Group Chief Executive Officer (acting severally) to seek all necessary authorizations (including, in particular, the approval of the Central Bank of Lebanon acting through its Central Council) and to perform all acts as may be necessary or advisable in the completion of such matters as are approved.
V. Summary of Matters Submitted to the General Assembly for Approval
Accordingly, the Board of Directors of the Bank has convened the General Assembly to consider and approve the following resolutions:
1. The Cancellation of the series "D" Preferred Shares and increase of the Bank's capital in order to round the nominal value of each individual share up to LL1,299;
2. The Amendment of the Bank's By-Laws, including, in particular articles 6 and 8, in order to reflect the foregoing;
3. The increase of the Bank's capital through the issuance of two series of Preferred Shares (pursuant to Lebanese Law No 308/2001);
4. The listing of such newly-issued Preferred Shares on the Beirut Stock Exchange;
5. The amendment of the Bank's By-Laws, including, in particular, articles 6 and 8 thereof, in order to reflect the actions described in items 3 and 4 above ;
6. The submission of the actions described in items 1-5 inclusive for approval by the Central Bank of Lebanon acting through its Central Council; and
7. The granting to the Chairman of the Board of Directors and to the Group Chief Executive Officer (acting severally) of the necessary powers to seek required approvals, to set deadlines and to perform all other acts and procedures in pursuit of all of the foregoing resolutions.
The proposedresolutions are subject to approval by the Central Bank of Lebanon, acting through its Central Council.
VOTING INSTRUCTIONS
Each Holder is hereby requested to return to the Depositary voting instructions, in the form provided separately by the Depositary for this purpose, by which such Holder may give instructions to the Depositary to vote for or against each and any resolution specified in the agenda for the General Meeting.
In order for a voting instruction to be valid, the above-mentioned voting instructions form must be completed and duly signed by the respective Holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message or market standard authenticated message format) and returned to the Depositary by the date that the Depositary shall specify.
INFORMATION REGARDING BANK AUDI S.A.L. - AUDI SARADAR GROUP
For information regarding the Bank, Holders are advised to review the following documents:
- The Bank's Annual Report for 2011; and
- The audited financial statements of the Bankas of and for the year ended December 31, 2012 and the accompanying notes and auditor's report;
The above documents (in Arabic or English, or both, as the case may be) may be obtained free of charge from the Bank and the Depositary at the addresses set forth below:
The Depositary:
Deutsche Bank Trust Company Americas
Winchester House
1 Great Winchester Street
London EC2N 2DB
Attn: Mr. Stanley Jones
The Bank:
Bank Audi s.a.l. - Audi Saradar Group
Bab IdrissOmar Daouk StreetBanque Audi Plaza, P.O. Box 11-2560BeirutLebanon
Attn: The Corporate Secretary
Related Shares:
BQAD.L