FBC secures $50m offshore credit

HARARE - Zimbabwe Stock Exchange-listed financial services group FBC Holdings Limited (FBC) says it has secured nearly $50 million in credit lines from international money lenders.

John Mushayavanhu (pictured), the group’s chief executive on Thursday said they had already drawn down $8 million from the Preferential Trade Area Bank (PTA).

“In the next few days we will be getting $40 million from the African Export-Import Bank (Afreximbank),” he said.

Mushayavanhu said he expects the funds to ease the acute liquidity crunch currently being experienced in the economy.

Since the introduction of the multi-currency system — dominated by the United States dollar — in February 2009, government’s capacity to play a fundamental role in boosting liquidity on the local market has remained choked.

Economic experts say the situation has been compounded by the Reserve Bank of Zimbabwe (RBZ)’s incapacity to print money, rendering the central bank ineffective in its contribution to money supply growth.

Mushayavanhu said the group’s ability to attract funding, at a time when the country is going through a liquidity crisis, is an indication that it is credit-worthy.

“We have also attracted international investors who are willing to take up a nine percent shareholding in the group.

“We are close to sealing a deal with an American equity firm as well as another company domiciled in Mauritius,” he added.

Mushayavanhu said the proceeds from the selling of the group’s treasury shares to international investors will be used to boost FBC’s micro-finance activities.

FBC decided to scout for an equity partner after a decision to dispose of its 58 percent stake non-core business Turnall Holdings Limited hit a brickwall.

Meanwhile, the group’s chairperson Herbert Nkala told shareholders at the group’s annual general meeting that the National Social Security Authority (Nssa) had increased its stake in FBC from 26 percent to 35 percent.

This was after shareholders’ approval of the merger of its banking arm and mortgage lending unit.

The merger will enable the enlarged commercial bank to meet the RBZ’s $50 million minimum capital threshold by the end of the month. Shareholders also approved the transfer of 1,09 billion ordinary shares, constituting 40 percent of Nssa’s shareholding in FBC Building Society (FBCBS), in return for over 80 million FBCH shares.

FBCBS will now be 100 percent owned by FBCH.

Nkala said the proposed merger had already been approved by the Competition and Tariff Commission.

“It has to be noted that the move to merge the bank with the building society is restructuring for capital gains purposes and FBC’s capital position in meeting the central bank’s minimum capital thresholds will be further strengthened,” he said.

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