FBCH pursues offshore credit lines

HARARE - Diversified financial services group FBC Holdings Limited (FBCH) says it is negotiating multi-million dollar offshore credit lines to help ease the prevailing liquidity challenges.

John Mushayavanhu, FBCH’s chief executive, yesterday said the group’s new Mauritian-based shareholder ShoreCap II Limited (ShoreCap) was facilitating the transactions.

“We have been talking to potential clients who are based in the United States who have shown an interest in advancing to us long-term loans with tenure of between seven to 10 years,” said Mushayavanhu.

Since adoption of the multi-currency system in 2009, Zimbabwean firms have failed to access meaningful international lines of credit due to perceived high country risk coupled with the recent global liquidity crisis.

“This is a first for the country because all along we have been getting short term loans. And the fact that American companies are showing an interest in Zimbabwe is a good sign for our economy,” said Mushavanhu.

The FBCH boss also noted that his company has for the past year received a total $82,98 million in loans from regional institutions such as Afreximbank and the PTA bank.

Last month ShoreCap, through their United States-based fund managers Equator Capital Partners, acquired a 7,3 percent shareholding valued at nearly $5 million in FBCH as part of a deal to recapitalise the group’s micro-finance division.

Meanwhile, FBCH recorded a 20 percent increase in profits to $8,3 million during the half year to June 2013.

Mushayavanhu told analysts that the growth in profit was driven by increased revenue from the financial services businesses as well as cost containment.

In the period under review, the group’s basic earnings per share surged 24 percent from 1,06 cents to 1,31 cents.

“The group’s earnings capacity continues to be buttressed by its diversified business model, with all subsidiaries except the manufacturing business, achieving results significantly higher than those achieved for the corresponding period last year,” he said.

FBCH declared an interim dividend of 0,149 cents.

In the six months to June the group’s total income recorded an increase of $0,1 million to $36,8 million from $36,7 million registered in the comparable period.

Mushayavanhu, however, noted that the increase in total income was weighed down by the mandatory reduction of bank charge and interest margins as stipulated in the memorandum of understanding between the banking industry and the Reserve Bank of Zimbabwe.

“In addition, the subdued performance of the manufacturing business also weighed down revenues,” he said.

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