Harare — KMQ Enterprises, an African Development Corporation-owned firm, has been granted regulatory approval to acquire nine percent of the Premier Finance Group which will bring its combined shareholding in PFG to 54 percent.

Germany-based ADC last month acquired 45 percent of PFG and together with the acquisition by its Mauritius domiciled company KMQ Enterprises of nine percent, brings the total value of the deal to US$6 million.

Regulatory approval had been obtained in respect of the 45 percent that is controlled by ADC.

PFG chairman Mr Sengi Mlambo said the transaction has been concluded and the new investors would soon be appointing four non-executive directors to the PFG board.

"The coming in of new investors would be followed by a restructuring exercise both at the group and the bank," said Mr Mlambo adding that the new investors were going to inject funds for recapitalisation.

"But they have not indicated any figures."

PFG partnership with ADC would enhance Premier's capacity to access capital and credit lines to support the growth of the existing business and other strategic ambitions.

Premier Bank is also in the hunt for a chief executive officer to take over from Mr Peter Wood who left the group on healthy grounds.

Herald Business understands that the candidate has already been identified.

Mr Mlambo said PFG acquisition by ADC indicated Zimbabwe presented significant investment banking opportunities as companies seek to recapitalise and enhance operating capacity.

Zimbabwe's economy, which has been sliding over the past decade, is showing strong signs of recovery.

The introduction of multi-currencies and resumption of production by most companies has gradually set the stage for a dramatic turnaround of the economy.

Over the last few years, deal making in Zimbabwe's corporate sector has remained substantially low.

However as companies seek to consolidate their operations and strengthen their balance sheets, the likelihood of mergers, acquisitions and debt and capital raising is very high in the short to medium term.

It is expected that a series of deals will be on the table particularly in the banking sector as the March 31, 2010 deadline to meet the prescribed minimum capital level approaches.