12 Feb 2010 15:46
INFORMATION STATEMENT
February 12, 2010
Dear Global Depositary Receipt Holder:
Reference is hereby made to the Deposit Agreement dated October 23, 1997 (as amended, the "Deposit Agreement") between Bank Audi S.A.L. - Audi Saradar Group (as successor to Banque Audi S.A.L.) (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. 12,250 per common share (the "Common Shares"), of the Bank. 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 Extraodinary General Assembly of Shareholders of the Bank to be held on March 2, 2010 (the "General Assembly"), at the Bank's head office in Beirut, which (among other things) sets forth the agenda for such General Assembly. 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 12 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 February 12, 2010, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to March 1, 2010, being the corresponding record date set by the Bank in respect of the General Assembly).
As set forth in such notice, at the General Assembly, shareholders of the Bank, including the Depositary, will be asked to consider and/or vote upon the following agenda:
1. A 10-for-1 split of all the shares constituting the Bank's Capital;
2. The Increase of the Bank's capital (the "Capital") through the issuance of up to 1,250,000 Preferred Shares (pursuant to Lebanese Law No 308/2001) and the determination of their terms and conditions;
3. The amendment of the Bank's by-laws (the "By-Laws"), including, in particular, Article 6 and Article 8 thereof, in order to reflect the actions described in items 1 and 2 above; and
4. The granting to the Chairman of the necessary powers to seek required approvals, to set deadlines and to perform all other procedures and acts 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 favor 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.............................................................................................................................................................. 5
Information regarding Bank Audi S.A.L - Audi Saradar Group.................................................................................... 6
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 authorised 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 Deposit Agreement relating to 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 depositary facility 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 Assembly to enable them to withdraw Deposited Shares and vote at the General Assembly.
SUMMARY BACKGROUND INFORMATION
I. Share Split
As at December 31, 2004, the market price per Common Share was U.S.$23.60 and the market price per GDR was U.S.$24.25. As at December 31, 2009, these market prices had increased to U.S.$82.95 per Common Share and U.S.$89.00 per GDR.
In its meeting held on February 5, 2010, the Board of Directors, pursuant to a recommendation of its Group Executive Committee, determined that it is beneficial to proceed to a split of the Bank's outstanding share capital, including the Common Shares and the Bank's U.S.$125,000,000 Non-Cumulative Redeemable Series "D" Preferred Shares (the "Series D Preferred Shares"), in each case, at a ratio of 10 like shares for each Common Share and Series D Preferred Share outstanding. In making such determination, the Board of Directors took into consideration the significant increases (in recent years) in the market price per Common Share to levels that are considerably higher than the average share prices of other MENA issuers for similar listed securities. The Board of Directors further noted the likely positive effect that a realignment of the market price effected by the proposed split may have on the liquidity of the Common Shares and on the Banks' ability to access a broader shareholder base. Accordingly, the Board of Directors resolved to propose to the General Assembly to approve the 10-for-1 split of the Common Shares and the Series D Preferred Shares currently comprising the Bank's outstanding share capital.
Upon approval and entry into effect of the above-described split of the Common Shares, the Bank intends, subject to obtaining all necessary authorizations and approvals, including for the listing of the additional GDRs to be issued, to cause the Depositary to effect a corresponding 10-for-1 split of the outstanding GDRs in accordance with Condition 10 of the GDRs and the provisions of the Deposit Agreement so that each GDR will continue to represent one Common Share.
II. Issuance of Preferred Shares
In its meeting held on February 5, 2010, the Board of Directors, pursuant to a recommendation of its Group Executive Committee, determined that it would be beneficial to proceed with a further issue of preferred shares to augment the Bank's share capital. In making such determination, the Bank considered the redemption and cancellation, in accordance with their respective terms, (i) in 2007, of the Bank's U.S.$60,000,000 Non-Cumulative Redeemable Series "A" Preferred Shares (which were issued at a price of U.S.$25 per share in 2002, carried annual distribution rights of U.S.$3.00 per share and were redeemable by the Bank at a redemption price of U.S.$25 per share) and (ii) in 2009, of the Bank's U.S.$100,000,000 Non-Cumulative Redeemable Series "C" Preferred Shares (which were issued at a price of U.S.$100 per share in 2004, carried annual distribution rights of U.S.$8.75 per share and were redeemable by the Bank at a redemption price of U.S.$100 per share). The Board of Directors also considered the structure of the Bank's current share capital, the Bank's expected growth and the current advantageous market conditions for the issuance of new preferred shares. The Board of Directors noted that, if the issuance of new preferred shares is approved, the net proceeds thereof will be applied 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 Assembly to approve the issuance of new preferred shares, to be captioned Series "E" Preferred Shares (the "Series E Preferred Shares"), on the indicative terms and conditions summarized below:
| Type: | Non-Cumulative Redeemable Preferred Shares, each with a nominal value of LL 1,225, which are expected to constitute Tier 1 capital. |
| Issue Size: | Up to U.S.$125,000,000. |
| Maturity/Tenor: | Perpetual, subject to call option. See "Call Option", below. |
| Issue Price: | U.S.$100.00 per Series E Preferred Share of which the equivalent of LL 1,225 shall represent the nominal value of each share, with the balance, which the Bank intends to maintain in U.S. Dollars, consisting of the 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. |
| Annual Distributions: | On account of fiscal year 2010, U.S.$4.00 per Series E Preferred Share and, on account of each fiscal year thereafter, U.S.$6.00 per Series E Preferred Share (subject to adjustments). While it is the intention of the Board of Directors to recommend to the shareholders of the Bank that they approve annual distributions in respect of the Series E Preferred Shares to the extent that the Bank has sufficient net profits available for the purpose, all payments of distributions in respect of the Series E Preferred Shares are subject to certain conditions in accordance with applicable Lebanese law. |
| Distributions Not Cumulative: | The right to distributions in respect of the Series E Preferred Shares shall not be cumulative. |
| Restrictions on Payment of Dividends upon Common Shares: | So long as any Series E 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 E Preferred Shares (and the Series D Preferred Shares) shall have been paid or declared and set apart in respect of such fiscal year. |
| Voting rights: | Except in limited circumstances reflecting applicable Lebanese law, the holders of Series E Preferred Shares shall not have voting rights. |
| Ranking: | The Series E Preferred Shares shall rank (i) pari passu with the Series D Preferred Shares and with any future series of preferred 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 E Preferred Shares then outstanding, in whole or in part within 60 days following the later of (i) the date of the General Meeting of Shareholders of the Bank at which the annual audited financial statements of the Bank for the year ended December 31, 2014 are approved or (ii) the fifth anniversary of the Issue Date and annually thereafter, in each case, at a redemption price equal to U.S.$100.00 per Series E Preferred Share, plus any declared but unpaid distributions. |
| Listing: | The Bank intends to list the Series E Preferred Shares on the Beirut Stock Exchange. |
The above is only an indicative summary of certain terms and conditions proposed to be applicable to the contemplated Series E Preferred Shares. Nothing contained in this Information Statement shall constitute an offer of, or an invitation to subscribe for or purchase, any Series E Preferred Shares.
The issuance of the Series E 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, respectively, in each case, necessitates resulting amendments to the Bank's By-Laws.
Accordingly, in its meeting held on February 5, 2010, the Board of Directors resolved to propose to the General Assembly to approve, upon its approval of either or both of the actions described above, the amendment of Articles 6 and 8 of the By-Laws to reflect the matters specified therein.
IV. Grant of power
In its meeting held on February 5, 2010, the Board of Directors noted that the actions described under sections I, II and III 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 either or both of the actions described under sections I and II above and its approval of related amendments to the Bank's By-Laws, to empower the Chairman of the Board of Directors to seek the necessary authorizations (including, in particular, the approval of the Central Bank of Lebanon acting through its Central Council) and generally 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
Further to the above, the Board of Directors has convened the General Assembly to consider and approve the following resolutions:
1. A 10-for-1 split of all the shares constituting the Bank's Capital, including the Common Shares and the Series D Preferred Shares;
2. The Increase of the Bank's Capital through the issuance of up to 1,250,000 Preferred Shares (pursuant to Lebanese Law No 308/2001) and the determination of their terms and conditions;
3. The amendment of the Bank's By-Laws, including, in particular, Article 6 and Article 8 thereof, in order to reflect the actions described in items 1 and 2 above; and
4. The granting to the Chairman of the necessary powers to seek required approvals, to set deadlines and to perform all other procedures and acts in pursuit of all of the foregoing resolutions.
The proposed resolutions 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 Depository 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 Assembly.
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.
BANK AUDI S.A.L. - AUDI SARADAR GROUP
For information regarding the Bank, Holders are advised to review the Bank's annual report for 2008. Copies of the the Bank's annual report for 2008 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 Idriss Omar Daouk Street Banque Audi Plaza, P.O. Box 11-2560 Beirut Lebanon
Attn: The Corporate Secretary