AfrAsia seeks $35m

HARARE - AfrAsia Zimbabwe Holdings Limited (AZHL)’s Mauritian shareholder plans to raise up to $35 million to address AfrAsia Bank Zimbabwe Limited (ABZL)’s capitalisation and solvency challenges.

James Benoit, AfrAsia Bank Limited (ABL)’s chief executive, told Business Live in an interview that the funds will be raised through a “combination of debt and equity”.

“We plan to raise any amount between $15 and $35 million,” he said, adding that they were also considering issuing bonds.

ABL — with assets worth about $1,6 billion — recently increased its stake in AZHL to 62,5 percent after acquiring former founder and chief executive Nigel Chanakira’s 33 percent shareholding.

Benoit said if raised, the capital will help ease the solvency challenges faced by AZHL’s flagship unit ABZL, which has imposed withdrawal limits to manage the crisis.

“The prevailing liquidity problems have been a challenge for us as well. We are working with the regulator (Reserve Bank of Zimbabwe) and we have received great support from the governor,” he said, further stating that ABL had so far invested a total $28 million in the financial institution.

Benoit — who co-founded and built ABL from the ground seven years ago — said investors and private equity groups in the region, and also locals, have expressed interest in their equity raising exercise.

He said in the meantime, ABL was not considering merging with any other financial institution.

“I am happy to build my own business at the moment,” he said, adding that the group had no plans to off-load its micro lender, MicroKing.

He dismissed market speculation that ABL was reluctant to inject further capital into the Zimbabwean business because of lack of confidence in its leadership.

However, Benoit, who said ABL inherited non-performing loans when it invested into AZHL — formerly Kingdom Financial Holdings Limited — in 2012, refused to disclose ABZL’s current financial position.

“I cannot give figures, our results are coming out soon. But, we have made final provisions for the bad loans,” he said.

Despite the challenges, Benoit said he did not feel their Zimbabwean investment had a bad start, arguing that “it’s a long term investment”.

He said there are “signs of growth” in Zimbabwe considering the normalising trade relations and re-engagement with the international community.

Comments (4)

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GALLERYCARTRIDGES - 10 November 2014

look east policy. people sleeping in banking halls

ndozvo - 11 November 2014

Yes, you may speak of all those hopes by my question is: " When are you going to settle all these liquidity problems you Kingdom bank Chefs. People are struggling to get their money like as if they wanted to borrow. God mus have mercy!!!!!!!!!!!!! TROUBLED

silence - 11 November 2014

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