HARARE - NMBZ Holdings Limited (NMBZ) says three foreign investors have agreed to inject $14,8 million into the group in return for a 27 percent stake.

The three strategic investors are AfricInvest Capital Partners (AfricInvest), FMO — a Dutch development bank and Norfund— a Norwegian development finance institution.

The funds will assist the group’s banking unit NMB Bank Limited (NMB Bank) in complying with the central bank’s new minimum capital requirements.

In August last year, Reserve Bank of Zimbabwe governor Gideon Gono requested banks to increase their capital bases to at least $100 million by June 2014 — in a phased manner.

NMB Bank has already complied with the first phase of $25 million, whose deadline expired on December 31, 2012.

The second phase deadline is June 30 this year whereby banks are required to have $50 million.

The financial institutions will then increase their minimum equity capital to $75 million by December 31, 2013, and eventually fully comply by June 2014.

“To accelerate NMB bank’s organic growth in order to ensure compliance with minimum regulatory capital requirements, the directors are proposing an equity relationship with AfricInvest, FMO and Norfund through the placement of NMBZ ordinary shares to raise a capital amount of approximately $14,8 million to capitalise NMB bank,” said Violet Mutandwa, NMBZ company secretary.

Mutandwa said the placement with the foreign investors is in line with the group’s central bank approved capitalisation plan.

“The placement is also expected to enhance the company’s investor profile and boost prospects of accessing offshore lines of credit,” she said.

NMBZ is also proposing to embark on a share capital consolidation programme to help reduce the number of ordinary shares which is inordinately high due to the hyperinflationary legacy.

“Subject to shareholder approval, the number of authorised shares in the share capital of the company will be consolidated from 3,5 billion of a nominal value of $0,000028 per share to 350 million of a nominal value of $0,000028,” said Mutandwa.

Following the announcement of new minimum regulatory capital levels, NMBZ directors are also proposing to increase the number of the company’s authorised ordinary shares by 250 million shares post the share capital consolidation.

“The proposed authorised share capital increase is meant to accommodate fundraising initiatives,” said Mutandwa.

After the proposed share capital increase, the company’s authorised ordinary shares will therefore become 600 million ordinary shares with a nominal value of $0, 000028.

The maximum potential buy-back outflow is $23,8 million for the first five years and $29,02 million on the 9th anniversary.

“In the event that shareholders do not approve the proposed placement, the directors are of the opinion that it will not be possible to implement the RBZ approved capitalisation plan to ensure your bank complies with the minimum capital levels within the set time frame,” said Mutandwa.

“Further, it will be difficult to improve the bank’s prospects of accessing offshore lines of credit which are critical to grow NMB bank’s market share and profitability.” - John Kachembere