AfrAsia Zimbabwe on upturn with fully-subscribed shares to fund growth
The USD 5 million rights issue of AfrAsia Zimbabwe, subsidiary of Mauritius banking services major AfrAsia, was fully subscribed, giving it respite from the capital crunch faced last year. (Image: Proudly African)
AfrAsia Zimbabwe, subsidiary of Mauritius banking services major AfrAsia, seems to be on the right track to meet fund requirement for growth in 2014 as it’s USD 5 million rights issue was fully subscribed.
“Shareholders of AfrAsia Zimbabwe Holdings Limited (AZHL) fully subscribed to the group’s recent US$5million rights offer as AZHL continues with its efforts to raise capital to fund growth and comply with regulatory requirements,” the group said in a statement released yesterday.
The rights issue closed on the December 31 2013. Mauritius-based AfrAsia Bank Limited followed its rights and still remains the significant shareholder in the group.
Its banking unit AfrAsia Bank Zimbabwe, which faced a capital crunch at USD 7.94 million capital as at September 2013 against expected capital of USD 25 million by December, was recently forced to cap intermittent cash withdrawal at USD 300.
The bank also featured among troubled banking institutions that were put under the surveillance of the Reserve Bank of Zimbabwe.
The rights issue launched as part of a phased capital raising plan to bolster the group’s balance sheet and capital position received shareholders’ approval at an Extraordinary General Meeting held in November last year.
The first phase of this plan was to raise US$20 million split into a rights issue of US$5 million and a private placement of shares to raise US$15 million.
AfrAsia said the private placement is still underway and it is expected to close soon, after which the group will provide a further updater on the final shareholding structure.
“The successful subscription of the rights issue is a testimony of the bright prospects of where we are going as a group. We are progressing well in our capital raising efforts and grateful for the continued support in the business by our shareholders,” said group chief executive Lynn Mukonoweshuro.
The group said it was glad that the liquidity situation is normalising and it is monitoring its branches daily to ensure that they are adequately funded to meet clients’ needs.
Last year, even as Mauritius-based AfrAsia Bank declared a 68% rise in profits for the financial year ended 30 June 2013, negative returns from its investment made in Zimbabwe, mainly on the back of non-performing loans, adversely impacted its bottom-line.
AfrAsia Bank Limited
Mauritius-based financial major AfrAsia Bank Limited is a boutique private and corporate bank, established in 2007.
The bank has the ability to tailor innovative banking solutions for both local and international markets focusing on – corporate and investment banking, private banking and wealth management, as well as international banking solutions.
In addition to Mauritius-based conglomerate GML, other strong strategic partners include PROPARCO (subsidiary of French Development Agency AFD), Intrasia Capital and Asiabridge.
The bank’s core banking and transactional capabilities are conducted through bank representative offices in Cape Town and Johannesburg, its asset management arm, AfrAsia Capital Management and its investment banking arm, AfrAsia Corporate Finance as well as a holding company in Zimbabwe.
Source: Company Website