6 Jun 2012 07:00
INFORMATION STATEMENT
June 5, 2012
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 June 22, 2012 (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 June 5, 2012, which is the record date (the "Record Date") established by the Depositary for this purpose (which is as near as practicable to June 21, 2012, 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. Further to the decision of the Extraordinary General Meeting of April 10, 2012, verification of the completion of the procedures for the increase in the Bank's capital through the issuance of 1,500,000 Series "F" Preferred Shares, and of the subscription for, and full payment of, such Series "F" Preferred Shares (the "Preferred Share Capital Increase");
2. The discharge of the Chairman and members of the Board of Directors in respect of activities related to the Preferred Share Capital Increase;
3. The increase of the Bank's share capital through the issuance of up to 356,610 Common Shares reserved to the owners of Stock Options who have exercised their Stock Options in 2012 and the determination of the issuance terms for such Common Shares;
4. The listing of such newly-issued Common Shares on the Beirut Stock Exchange;
5. The amendment of the Bank's By-Laws (the "By-Laws"), in particular, Article 6 and Article 8 thereof, in order to reflect the actions described in items 3 and 4 above;
6. The submission of the actions described in items 3, 4 and 5 above for approval by the Central Bank of Lebanon, acting through its Central Council;
7. The granting of the necessary powers for the implementation of the actions approved by the Extraordinary General Meeting;
8. The granting of two loans to a related party in accordance with article 152 of the Code of Money and Credit; and
9. The approval of the acquisition of shares from a subsidiary.
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.............................................................................................................................................................. 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 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. Verification of the completion of the Preferred Share Capital increase:
On April 10, 2012, the Extraordinary General Meeting of Shareholders of the Bank resolved to increase the Bank's capital by an amount of LL 1,881,000,000 through the issuance of 1,500,000 Series "F" Preferred Shares with a nominal value of LL 1,254 each, and an issue premium for each Series "F" Preferred Share to be determined in US Dollars as the difference between U.S.$100.00 per Series "F" Preferred Share and the U.S.$ equivalent of LL 1,254, computed at the exchange rate prevailing on the first day of the subscription period, which began on May 18, 2012.
On May 2, 2012, the Central Bank of Lebanon, acting through its Central Council, approved the resolutions of the Extraordinary General Meeting dated April 10, 2012 authorising this capital increase.
In accordance with applicable Lebanese Law, the General Meeting must be convened again to:
i. verify the completion of the procedures for the Preferred Share Capital Increase; and
ii. discharge the Chairman and members of the Board of Directors in respect of activities related to the Preferred Share Capital Increase;
II. Increase in Capital following the exercise of Stock Options:1
On February 2, 2006, the Extraordinary General Meeting of the Shareholders of the Bank approved the establishment of a stock option plan and authorized the issuance thereunder of options (the "Stock Options") relating to up to 50,000,000 Common Shares, at a price equal to or in excess of par value, to be awarded to executives and other employees of the Bank. It also delegated to the Board of Directors the authority to select the beneficiaries (or "optionees"), and to set additional terms, for each grant of Stock Options.
The Board of Directors granted, on April 26, 2006, Stock Options entitling the owners thereof, upon exercise, to receive 29,815,760 Common Shares at an exercise price of U.S.$2.719 per Common Share and granted, on May 10, 2007, additional Stock Options entitling the owners thereof, upon exercise, to receive 1,701,120 Common Shares at an exercise price of U.S.$4.033 per Common Share. All Stock Options (irrespective of their issue date) are partially subject to certain performance criteria and, provided such performance criteria are met (as applicable), become exercisable, from time to time, in part, over a period of three or four years (as the case may be).
During 2012 up to March 31, 2012, which is the date on which the stock option plan expired, a total of 328 optionees exercised, in whole or in part, their vested Stock Options relating to a total of 309,260 Common Shares (out of Stock Options relating to 356,610 Common Shares exercisable in 2012). Optionees who have exercised their vested Stock Options in 2012 do not include any Director of the Bank.
Following the expiration of the stock option plan (i) no additional Stock Options can be awarded thereunder, and (ii) Stock Options previously granted thereunder and still unexercised have been cancelled.
In order to effect the issuance of Common Shares against the exercised Stock Options, (i) the Bank's capital must be increased through the issuance of 309,260 Common Shares at a price equivalent to the exercise price of the corresponding Stock Options of U.S.$2.719 per Common Share with the difference between the exercise price per Common Share and the nominal value of each such Common Share being accounted for as issue premium; (ii) the newly-issued Common Shares must be allocated to the optionees who have exercised their Stock Options; (iii) the newly-issued Common Shares must be listed on the Beirut Stock Exchange; and (iv) the Bank's By Laws, including, in particular (but without limitation) Articles 6 (Capital) and 8 (Type of Shares), must be amended as necessary to reflect the above, which actions are subject to the approval of the General Meeting of Shareholders.
As per applicable Lebanese regulations, the aforementioned proposed actions are subject to approval by the Central Bank of Lebanon, acting through its Central Council.
In its meeting held on May 24, 2012, the Board of Directors noted that the actions described above require the obtaining of certain authorisations and the completion of certain other acts. Accordingly, the Board of Directors resolved to propose to the General Meeting to empower the Chairman of the Board of Directors and the Group CEO - General Manager (as applicable), each acting singly, to seek all necessary authorisations (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.
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1 In the following discussion, the referenced numbers of Common Shares and the referenced exercise prices have been adjusted to reflect the 10 for 1 share split, which was approved by the Extraordinary General Meeting of March 2, 2010 and became effective on May 24, 2010
III. Granting of loans in accordance with article 152 of the Code of Money and Credit
On June 1, 2012, the Board of Directors adopted a proposal to approve the granting of two loans in an aggregate amount of U.S.$10 million to a related party having common directors with the Bank. The new loans are secured by duly perfected first degree mortgages representing 140% of the aggregate value of the loans and are otherwise made on regular commercial terms. The Audit Committee of the Board of Directors expressed no reservations in connection with the aforementioned proposal.
In accordance with Article 152 of the Code of Money and Credit, the completion of the aforementioned loans is subject to the approval of the General Meeting of Shareholders.
IV. Approval of the acquisition of shares from a subsidiary
On May 14, 2012, the Bank, in its capacity as the majority shareholder of LIA Insurance sal, entered into an agreement with Saham Finances sa for the acquisition by Saham Finances sa of 81% of the capital of LIA Insurance sal.
Within the actions contemplated prior to the completion of the aforementioned transaction, the Bank intends to purchase from LIA Insurance sal 98.33 % of the shares of a subsidiary of LIA sal, whose activity is limited to the ownership of land located next to the offices and a branch of the Bank in the area of Dora, in the northern suburb of Beirut, which is used for parking. The transaction is for a total consideration of U.S.$3 million, which has been deemed to be fair value by the Board of Directors upon the recommendation of the Real Estate Committee of the Bank.
Pursuant to Article 158 of the Lebanese Code of Commerce, a purchase transaction between a company, such as the Bank and its subsidiary, such as LIA Insurance sal, that has common directors with the Bank, is subject to the approval of the General Meeting of Shareholders.
V. Summary of Matters Submitted to the General Meeting for Approval
Further to the above, the Board of Directors has convened the General Meeting to consider and approve the following resolutions:
As per section I above:
1. Further to the decision of the Extraordinary General Meeting of April 10, 2012, verification of the completion of the increase in the Bank's capital through the issuance of 1,500,000 Series "F" Preferred Shares, and of the subscription to, and full payment of, such Series "F" Preferred Shares;
2. The discharge the Chairman and members of the Board of Directors in respect of activities related to the Preferred Share Capital Increase;
As per section II above:
3. The increase of the Bank's share capital through the issuance of up to 356,610 Common Shares reserved to the owners of Stock Options who have exercised their Stock Options in 2012 prior to the expiry of the stock option plan and the determination of the issuance terms for such Common Shares;;
4. The listing of such newly-issued Common Shares on the Beirut Stock Exchange;
5. The amendment of the Bank's By-Laws, in particular, Article 6 and Article 8 thereof, in order to reflect the actions described in items 3 and 4 above;
6. The submission of the actions described in items 3, 4 and 5 above for approval by the Central Bank of Lebanon, acting through its Central Council;
7. The granting of the necessary powers for the implementation of the actions approved by the Extraordinary General Meeting;
As per sections III and IV above:
8. The granting of two loans to a related party in accordance with article 152 of the Code of Money and Credit; and
9. The approval of the acquisition of shares from a subsidiary;
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, which contains the audited financial statements of the Bank as of and for the year ended December 31, 2011 and the accompanying notes and auditors report thereto;
Copies of this document 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