Econet injects $50m into TN Bank

HARARE - Econet Wireless Zimbabwe Limited (Econet) has injected $50 million into TN Bank Limited (TN Bank) towards recapitalisation of the banking arm, businessdaily heard this week.

This comes as the telecommunications company’s founder Strive Masiyiwa in March said TN Bank will be repositioned and rebranded in a year’s time.

“Yes… Econet poured in $50 million last week towards recapitalising the bank,” a source close to the developments said.

The source added that the bank had also acquired state of the art Automated Teller Machines (ATMs) that will be rolled out simultaneously with the rebranding exercise.

“The rebranding exercise is also expected to begin in July at the latest.”

Reports also say the Zimbabwe Stock Exchange (ZSE)-listed Econet, the country’s largest mobile network operator by subscriber base, has changed TN Bank’s operating system following acquisition of a controlling stake in the financial institution.

Econet said it could not immediately comment on the developments while TN Bank chief executive Kwanele Ngwenya’s executive assistant Kingdom Vhela had not responded to questions by time of going to print.

However, Econet is widely anticipated to comment on the issues at its financial results briefing expected today.

In February, Econet increased its stake in TN Bank to a controlling 97,96 percent following a cash and share swap deal.

The group then delisted the bank from the ZSE.

Initially, Econet held a 45 percent stake in TN Bank’s issued ordinary share capital after injecting $20 million into the institution in July last year.

Under the takeover deal, Econet paid cash for 830 417 TN Bank shares while 72 542 997 shares were exchanged for Econet’s.

Considering that Econet was offering 15,91 cents for every TN Bank share, the cash transaction equates to $132 119.

The remaining 2,04 percent is held by minority shareholders.

A total of 76, 204, 093 million TN Bank shares had been previously held by minority shareholders.

Meanwhile, TN Bank has complied with the Reserve Bank of Zimbabwe’s (RBZ) $25 million minimum capital requirement by December 31, 2012.

Last year, RBZ governor Gideon Gono ordered banks to recapitalise to a minimum $100 million in a phased manner.

Going forward, TN Bank is required to raise 50 percent of the $100 million minimum capital by June 2013, 75 percent by December same year and 100 percent by June 2014. - Kudzai Chawafambira

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