AfrAsia targets $50m capitalisation

HARARE - AfrAsia Kingdom Zimbabwe Limited (AKZL) has embarked on initiatives to strengthen the group’s businesses in response to regulatory requirements for additional capital and in preparation of an expected economic upturn, which will open new opportunities in the sector.

The group said it will launch a capital raising exercise in view of meeting the $50 million threshold set by the Reserve Bank of Zimbabwe (RBZ).

Under the initiative, AKZL will do a rights issue which will be advised by Cosmos Capital and AfrAsia Corporate Finance as corporate arrangers.

AfrAsia Bank Limited, which holds 35,4 percent stake in AKZL, have already indicated that they will follow on their rights in the forthcoming issue.

Interest has also been received by other investors to participate in the capital raising exercise.

The capital raising will particularly enable the group’s banking subsidiary Kingdom Bank Limited to progressively achieve the required regulatory minimum capital threshold as announced by the central bank.

Sibusisiwe Bango, AKZL chairperson, said additional capital would ensure that the group’s subsidiaries are able to support clients’ funding needs or requirements, while also enabling them to fund growth plans.

“Based on the restructuring strategies currently underway, the planned capital raising should enable the group to take advantage of existing and new growth opportunities in its key market segments,” she said.

Bango said she was confident that the group’s shareholders will support the proposed initiatives, which will enable AKZL to exploit and pursue growth opportunities in its core business segments.

“We value the continuous support of our shareholders and believe that, with such unity of purpose, we can work to achieve the exciting growth plans that the group has. We will continue to update all our stakeholders of any relevant developments as they occur,” she said.

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

In the first phase, whose deadline expired on December 31, 2012, commercial and merchant banks were supposed to increase their minimum capital to $25 million, then up it to $50 million by June 30 this year and $75 million by December 31.

The institutions should reach $100 million by June 30, 2014.

According to RBZ’s 2013 Monetary Policy, a total 14 banking institutions out of 21 complied with the initial phase. - Eric Chiriga, Business Editor

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