African Bank have released an announcement this morning announcing

African Bank have released an announcement this morning announcing "...that it has finalised the transaction to transfer the financial services business of its subsidiary Ellerine Furnishers (Pty) Ltd (Ellerines) to fellow subsidiary African Bank Limited (African Bank)." Hurrah!! It is a circular accounting exercise at the end of the day, but it is very important that African Bank now controls what they were ALWAYS after when the transaction took place initially. No, Leon Kirkinis has no desire to be the retail king of South Africa, but this is rather a consolidation and splitting the two businesses into their core line.



Here are some of the notes to investors, to simplify your need for knowledge, here goes


"2. Adjustments to the Balance Sheet have been made on the assumption that:


2.1 The acquisition and disposal was effective on 31 March 2010;


2.2 The transaction will be settled through a combination of R1,1 billion in cash and R6,2 billion on inter-company loan account.


2.3 The loan account is reduced by R0,5 billion of set-off against inter-company funding


2.4 The remaining R5,7 billion is paid to ABIL as dividend in specie and utilised to subscribe for ordinary shares in African Bank."



There is a conference call later today, at four this afternoon, but the long and the short of it all is that "the transaction will have no impact on the ABIL group consolidated earnings and balance sheet for the 2010 financial year, given that it is a transaction between wholly owned subsidiaries."