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AfricaMoney | June 29, 2017

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MCB and SBM consider stake in CARE Ratings’ Mauritius arm

MCB and SBM consider  stake in CARE Ratings’ Mauritius arm, as the rating company attempts to foray in the Dark Continent.

Two leading banks in Mauritius, the Mauritius Commercial Bank and State Bank of Mauritius together with the African Development Bank are likely to buy about 20-22% stake in the Credit Ratings (Africa) Pvt Ltd as the company attempts to foray in the Dark Continent. The new venture with an initial paid-up of $400,000, would be critical for CARE Ratings for its African foray as Mauritius serves as an investment link between Asia and Africa.

Two leading banks in Mauritius and the African Development Bank are likely to buy about 20-22% stake in CARE Ratings’ new subsidiary in Mauritius, as the home-grown rating company attempts to foray in the Dark Continent.

Mauritius Commercial Bank and State Bank of Mauritius are likely to pick 5-6% each in the Credit Ratings (Africa) Pvt Ltd while African Development Bank (AfDB) may buy 10% stake.

The new venture with an initial paid-up of $400,000, would be critical for CARE Ratings for its African foray as Mauritius serves as an investment link between Asia and Africa.

Global Credit Rating Co. of South Africa may also pick up stake in Credit Ratings (Africa), the first rating company in Mauritius.

“CARE would be open to looking for other strategic partners as per our growth plans in Africa. However it will be done only after taking the existing partners in the venture on board,” CARE Ratings Managing Director & Chief Executive Officer DR Dogra told ET.

The three banks have signed MoUs with the rating company but the details of investment are now being worked on.

CARE Ratings would hold the majority stake. As per the initial talks, the Mauritius Commercial Bank would invest through its subsidiary MCB Capital Markets while State Bank of Mauritius would invest through its subsidiary SBM NFC Investments.

“Ours is not a very capital intensive business as we are in the knowledge industry. Further capital requirement will be assessed based on our entry strategy in each geography and extant regulations for credit rating agencies,” Dogra said.

The new subsidiary would initially focus on Mauritius market and then it would expand to other major geographies of Africa.

This rating operation would give the company a strategic geographical and political advantage as a lot of funding to Africa happens via Mauritius.

“Right now we are evaluating the details of which geographies within Africa to expand to next. Countries with growth potential like Nigeria, Kenya, Rwanda and others are being considered,” Dogra said.

 Source :economictimes.indiatimes.com

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