Foreigners bid for Agribank stake

HARARE - Foreign institutions are among investors that have submitted bids to acquire a 49 percent stake in the Agricultural Development Bank of Zimbabwe (Agribank), businessdaily has established.

Insiders said a due diligence exercise has already been completed.

“All I can confirm at this moment is that bids have been submitted.

These are both foreign and local. We will only name those who acquire the stake at the appropriate time,” the insider said, adding that the privatisation process is scheduled for completion by September.

Government — which wholly owns Agribank — agreed to privatise the institution, but will retain a 51 percent shareholding.

The move is set to boost the finance house’s capital levels and capacity to fund the agricultural industry.

Musa Capital and Neverseez Capital have been appointed as financial advisors while Sawyer and Mkushi are the legal consultants.

Last year, the Agribank announced that its compliance with the new Central B’sank $100 million minimum capital requirement was dependent on the conclusion of the privatisation process.

Reserve Bank of Zimbabwe governor Gideon Gono last year ordered banks to boost their capital in a phased manner.

In the first phase, whose deadline lapsed on December 31, 2012, the institutions were supposed to increase their capital to a minimum $25 million.

Agribank failed to comply.

In his 2013 Monetary Policy Statement Gono said although Agribank had not yet met the minimum capital requirements, the institution had made significant progress towards compliance.

As of December last year, Agribank’s capital stood at $22, 64 million.

The agro-focused institution has in the past experienced challenges in sustaining the requirements of farmers due to lack of funds.

Last year, government injected $10 million into Agribank, which contributed to its recapitalisation.
It is expected to put in another $5 million.

In the 2013 national budget, Agribank was allocated $4 million — $1 million for capitalisation and $3 million for a livestock facility.

While economic analysts have supported the privatisation of the bank, most farmer organisations have opposed the move suggesting the investor may not be keen to support the country’s agriculture sector.

Agribank was granted a commercial licence in June 1999.

The bank subsequently began operations in January 2000.

It remains focused on agro lending, augmented by corporate, treasury and retail banking operations.

Agribank currently has 40 branches.

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