AfrAsia to inject $100m into Kingdom

HARARE - Mauritius-based AfrAsia Holdings Limited (AfrAsia) plans to inject over $100 million into its Zimbabwean subsidiary to help ease liquidity challenges in the country.

This comes as the financial group recently increased its interest in AfrAsia Kingdom Zimbabwe Limited (AKZL) to 54 percent from 35 percent after acquiring 30 percent shareholding previously held by Kingdom Financial Holdings Limited founder Nigel Chanakira.

Sibusisiwe Bango, the AKZL chairperson, said the deep-pocketed AfrAsia will soon increase its support into the local unit from $10 million to over $100 million.

“AfrAsia has injected liquidity support amounting to $10 million after the reporting date and has committed to lead the proposed rights issue and private placement to raise $20 million by November 30, 2013 as the first phase and another $80 million through private placement as the second phase of capitalisation,” she said.

However, details of the proposed rights offer and the private placement are subject to shareholder approval.

Bango noted that the coming in on board by AfrAsia into the country after the harmonised elections shows the strong belief the banking group has in the future of Zimbabwe.

“This will continue to send the right signals to other foreign investors that Zimbabwe is indeed a good destination of capital investment.”  She added that the financial group will continue to send the message on all international platforms to ensure that the much-needed continental and global foreign direct investment makes its way into Zimbabwe.

Following AfrAsia’s increased stake in AKZL — with the blessings of the Reserve Bank of Zimbabwe — Chanakira will step down as director of all AfrAsia Kingdom Holdings Limited and AKZL entities with immediate effect, but will retain the “Kingdom” trademark from AKZL.

AfrAsia Kingdom Zimbabwe Limited will be rebranded to AfrAsia Zimbabwe Holdings, Kingdom Bank to AfrAsia Bank and Kingdom Asset Management to AfrAsia Capital Management.

The deal will also result in restructuring of the board and management of AKZL and KBL, but AKZL chief executive Lynn Mukonoweshuro will retain her post at the helm of the group.

Bango said the restructuring in local operations will pave way for injection of capital into the group, which should see the strengthening of the company’s balance sheet in preparation for underwriting significant business into the future.

“The new branding will benefit greatly from the infusion of international banking products, experience and synergies that will result from the association with an international banking group,” she said.

Meanwhile in the 18 months to June 2013, the group posted a loss of $16 million compared to a profit of $782 031 for the year ended December 2011.

“The loss was largely from the commercial banking arm operations due to the staff voluntary separation exercise as well as significant impairment allowance on the bank’s loan book,” said Bango.

During the period under review, the group’s micro finance unit registered a profit of $3,7 million compared to $2 million in the prior year.

Kingdom Asset Management recorded a 100 percent increase in profit from $132 172 in the comparable period to $263 696 in June 2013.

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