AfrAsia to restructure Zimbabwe arm
AfrAsia will pay prominent Zimbabwe banker Nigel Chanakira $12 million following the disposal of his 30 percent stake in the Mauritian bank’s Zimbabwe arm – AfrAsia Kingdom Zimbabwe Limited (AKZL). (Image: blog.afrasiabank.com)
Restructuring’s never easy as Mauritius-based AfrAsia Bank has found out to its cost lately. The island nation’s banking major will pay prominent Zimbabwe banker Nigel Chanakira $12 million following the disposal of his 30 percent stake in the Mauritian bank’s Zimbabwe arm – AfrAsia Kingdom Zimbabwe Limited (AKZL). To begin with, AfrAsia had 35 percent stake in AKZL, acquired for $9.5 million in January last year.
While the spadework has been done, the final transaction awaits shareholders’ approval at an extraordinary general meeting to be held next month.
Chanakira divested his stake in AKZL just last month, disposing 289,133,648 shares he indirectly held through his family investment vehicle Crustmoon.
However, of the $12 million payable to him, he will only get $2.5 million in cash. The balance will be received through cessation of certain claims against loan debtors and related security assets held by Kingdom Bank Limited (KBL), according to a statement by AKZL. As part of the deal, AKZL will in turn sell its remaining interest in the Botswana-based offshore bank, Kingdom Bank Africa Limited (KBAL) to Crustmoon.
The restructuring, when completed, will result in Crustmoon completely exiting AKZL and in the transfer of the group’s 35.7 percent interest in KBAL to Crustmoon.
Following AfrAsia’s increased stake in AKZL, approved by the Reserve Bank of Zimbabwe, Chanakira will step down as director of all AKZL entities with immediate effect, but will retain the “Kingdom” trademark from AKZL. Accordingly, AKZL will be rebranded to AfrAsia Zimbabwe Holdings, Kingdom Bank to AfrAsia Bank and Kingdom Asset Management to AfrAsia Capital Management.
The deal will also result in restructuring of the board and management of AKZL and KBL, but AKZL chief executive Lynn Mukonoweshuro will retain her post at the helm of the group.
AfrAsia will also seek to inject $100 million through a rights offer and private placement which are subject to shareholder approval.
Sibusisiwe Bango, AKZL’s board chairperson recently said the restructuring in local operations will pave way for injection of capital into the group, which should see the strengthening of the company’s balance sheet in preparation for underwriting significant business into the future.
Meanwhile in the 18 months to June 2013, the group posted a loss of $16 million compared to a profit of $782,031 for the year ended December 2011, largely arising from commercial banking operations, the company claimed. A staff voluntary separation exercise and high proportion of bad debts was responsible for the losses, Bango noted.
Source: Biz Day, Zimbabwe