Zimbabwe: Kingdom Seals Deal With AfrAsia Bank
KINGDOM Financial Holdings Limited has reached an agreement with Mauritius-based financial services group AfrAsia Bank Limited which will invest US$9,5 million for a 35 percent equity in the group.
The investment completes the recapitalisation of KFHL and paves the way for the group to accelerate its strategic initiatives to consolidate the operations of its key subsidiaries.
Kingdom has been pursuing several initiatives to recapitalise its operations by raising US$25 million, comprising US$15 million equity and US$10 million debt finance.
The capital-raising model sought to raise the required amount through a combination of a rights issue, private placement and public offering.
The equity capital raised is largely required to recapitalise Kingdom Bank Limited, the flagship banking subsidiary in the Kingdom stable.
"After months of hard work by Kingdom directors, management team and advisors, we are pleased to advise all our stakeholders, and most importantly our valued clients, that Kingdom and AfrAsia Bank Limited have reached agreement.
AfrAsia will invest US$9,5 million in Kingdom for a 35 percent equity stake," Kingdom said in a statement to Herald Business.
"We, Kingdom and AfrAsia, are pleased with this development and are optimistic about the future of the company as we prepare a new chapter in the future of Kingdom through the various strategic initiatives that were outlined when the capital raising programme was announced."
The investment by AfrAsia and the US$2,8 million raised through the rights issue will be used to recapitalise Kingdom Bank, which together with the existing capital will result in Kingdom Bank having core capital in excess of the minimum capital requirements set by the Reserve Bank of Zimbabwe.
Kingdom said it had already received approvals from the Ministry of Finance, the Exchange Control and the Bank Licensing, Supervision and Surveillance divisions of the Reserve Bank of Zimbabwe and the Ministry of Youth Development, Indigenisation and Empowerment.
"Kingdom is working towards securing an outstanding approval which the group is confident will be granted," the group said.
"We take this opportunity to thank our stakeholders, the relevant regulatory authorities and our valued clients for their continued loyalty, support and confidence in the company."
AfrAsia is a rapidly growing and significant banking group in Mauritius. Mauritius has become an increasingly important market for international capital seeking opportunities in Africa.
Group chief executive officer Mrs Lynn Mukonoweshuro said: "This is a momentous and important occasion for us as we embark on a new future in the history of Kingdom. The past few years have been challenging but by God's grace, through the continued loyalty of our customers and the support of the relevant stakeholders, including our regulator, we have persevered.
"Kingdom will never be the same again and we face the future with renewed confidence of achieving the strategic objectives we are pursuing to grow our business."
The founder and anchor shareholder of Kingdom, Mr Nigel Chanakira, said he was never in doubt that Kingdom would be able to raise the required capital.
"We are led by this unwavering faith that we achieve anything that we set our minds to accomplish.
It has been a challenging yet exciting period since we embarked on this capital raising exercise, and never a moment did I doubt that we would succeed as has been vindicated by the investment in Kingdom by AfrAsia.
"The AfrAsia Bank transaction will open new channels of much needed capital, lines of credit and deal flow for our loyal client base. I am excited about the prospects beckoning on our horizon. "
Published: 24 January 2012