Bright Madera Business Reporter
ABC Holdings is seeking to raise US$50 million through a rights issue to be underwritten by the African Development Corporation, a substantial shareholder in the financial institution. The pan-African financial services group, domiciled in
Botswana, will issue 83 333 333 shares at P4,28 on the basis of one new offer share for every 1,79 ordinary shares held.
In a circular to shareholders yesterday, ABCH said it was also seeking a waiver by shareholders of a likely obligation by ADC to buy out the minority shareholders.
ADC, which controls 23 percent of the group, could increase its stake to 35 percent if it takes up the unsubscribed rights issue shares.
In terms of the Botswana Stock Exchange requirements, ADC would be obliged to make an offer to all other shareholders to acquire the shares.
But the BSE indicated that it would waive the requirement, provided that among others, the majority of independent shareholders, other than ADC, also waive the obligation.
“Accordingly, the board seeks an ordinary resolution of independent shareholders other than ADC, to waive the requirement,” read part of the statement to shareholders.
ADC bought into ABCH last year through an open market deal after exiting Premier Finance Group, now Ecobank. The rights issue comes after the banking group was considering engaging a third party through a private placement.
Proceeds of the rights issue are expected to support its regional operations.
ABC Holdings operates in Botswana, Zimbabwe, Mozambique, Zambia and Tanzania, where its operations have been growing rapidly.
The group’s balance sheet has significantly increased over the last couple of years, making it difficult to grow further without fresh money.
ABCH, listed on the BSE and the Zimbabwe Stock Exchange, now has a balance sheet of US$1 billion.
Group profit attributable to shareholders stood at 83 million pula for the full year ended December 31, 2011.
Zimbabwe contributed the most to the attributable profits, weighing in with 39 percent, followed by Zambia at 23 percent, Botswana and Mozambique each with 20 percent and Tanzania weighing down with minus 2 percent on the back of a 17 million pula loss.
Zimbabwe operations registered a 106 percent increase in attributable profit to 55 million pula in the period under review.
Interest income and non-interest income rose 137 percent to 136 million pula and 51 percent to 129 million pula, respectively.
Meanwhile, at the AGM shareholders are also expected to vote for the proposed amendments to the Articles of Association and the re-election of retiring directors.
Chief executive Mr Doug Munatsi and chief finance officer Dr Lakshmi Shyam-Sunder retire by rotation and are eligible for re-election.
Mr Munatsi has been chief executive since the inception of the company in 2000.
ABCH lost US2c to close at US56c on ZSE yesterday.