The main purpose of this capital raising is to sustain and fund the growth of the Bank as it expands in both the domestic market and regionally. James Benoit, ABL’s Chief Executive Officer commented “The current capital increase is another vote of confidence from our existing shareholders, who have believed in our vision and strategies from the start, and from new investors who have examined the track record of the Bank and are excited by our growth prospects. This new capital will take our total regulatory capital (TIER1 and TIER2) to nearly Rs2.0 billion and positions us to continue our profitable growth in our home market of Mauritius as well as to start to execute on our strategy of regional expansion.
ABL has a well-defined strategy to expand its operations in the SADC and COMESA regions, both organically and through carefully selected acquisition opportunities. Any acquisition by ABL must fit a rigorous set of criteria that incorporates valuation, operational profile, strength of existing domestic operations and the ability for ABL to exercise control, either directly or in partnership with other key shareholders.
In line with this expansion strategy, ABL has also announced an investment of USD 9.5m for a 35% stake in Kingdom Financial Holdings Limited (“KFHL”), an investment holding company domiciled in Zimbabwe with interests in the banking, stockbroking and asset management sectors in Zimbabwe and Malawi.
KFHL has a focused and resilient business model as evidenced by its impressive financial performance over the past decade, despite the challenging economic environment in Zimbabwe over this time. The investment by ABL is an endorsement of this business model, which is underpinned by innovative products; a strong management team; best in class IT systems; and close relationships with clients. These characteristics are all shared with ABL and the alignment of business models was a key attraction of the transaction for ABL.
Arnaud Lagesse, Chairman of ABL, outlined how the transaction was consistent with ABL’s strategy for regional expansion. He said “KFHL is a profitable financial services group in the high growth southern African market. The transaction is highly accretive for ABL, but also provides us with a unique opportunity to expand our franchise in the SADC region through an established local operation and with highly credible local partners.”
The founder and current anchor shareholder of Kingdom, Nigel Chanakira, said "this transaction will open new channels of much needed capital, lines of credit and deal flow for our loyal client base. I am excited about the prospects beckoning on our horizon."
Kamben Padayachy, General Manager and Head of Global Banking, Treasury and Markets for ABL highlighted the potential returns of the transaction, as well as the careful structuring of the deal to minimize the risk for ABL. “This exceptional investment opportunity has the potential for high rewards in a largely undeveloped market. The proposed transaction structure will enable ABL to appropriately mitigate inherent risks to ensure that the full benefits of the transaction are obtained.”
AfrAsia Corporate Finance acted as Exclusive Arranger for the capital raising and as sole transaction adviser to ABL and co-adviser to KFHL on the KFHL investment. Cosmos Capital acted as co-adviser to KFHL with regards to the investment by ABL.
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AfrAsia Bank Limited
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About AfrAsia Bank Limited
AfrAsia Bank is a boutique bank that offers a comprehensive range of financial solutions while ensuring that customers benefit from a dedicated, personalized and unparalleled customer service. Our partnership approach and our team of highly experienced professionals allow our clients to discover a different facet of banking with customized services focusing on:
- Corporate and Investment Banking
- Private Banking and Wealth Management
- International Banking Solutions
With our Foreign Institutional Investor (FII) License in India, our Corporate Finance House (AfrAsia Corporate Finance) and three representative offices in South Africa, our stake in AXYS Capital Management and our international stakeholders such as Dale Capital Group of South Africa, Intrasia Capital of Singapore and Proparco (filiale de l'Agence Française de Développement)
About AfrAsia Corporate Finance
AfrAsia Corporate Finance (ACF), is a joint venture company of AfrAsia Bank Limited. ACF provides financial advisory and capital raising solutions to clients in connection with Mergers & Acquisitions, Restructurings and other strategic matters, and also manages investment funds that integrate capital with its advisory capabilities.
ACF advises a wide range of organisations across the SADC region, from corporates and project sponsors to investment funds and financial institutions. ACF also supports its client relationships with innovative financing solutions ranging from bridging facilities for acquisitions to underwritten equity issues to short term working capital facilities.
Advisory services include M&A, Restructuring and Project Finance advisory, as well as on-going Strategic advice.
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Headquartered in Mauritius, AfrAsia Bank is a boutique bank that offers a comprehensive range of financial solutions focusing on Corporate and Investment Banking, Private Banking and Wealth Management, International Banking, Treasury.