3 December 2012

Zimbabwe: Agribank Gets New Advisors

Government has appointed Neverseez & Mussa Capital as financial advisors for the restructuring of Agribank, the State Enterprise Restructuring Agency has said. Sawyer & Mkushi were also appointed legal advisors, SERA executive director Mr Edgar Nyoni said in a statement.

"The appointments were undertaken following the approval the State Procurement Board of the two firms through an open tendering process," said Mr Nyoni.

"In line with restructuring procedures manual which outlines for Government Restructuring Guidelines, the advisors will work with the Agribank Restructuring Technical Committee which was appointed Government to spearheading restructuring programme."

Agribank is among 10 state enterprises and parastatals listed for urgent restructuring.

The restructuring of Agribank is part of the strategy to re-capitalise the Bank in its pursuit to meet the RBZ's new capital requirements for commercial banks.

The restructuring programme will culminate in the engagement of a strategic partner who will re-capitalise the bank and bring additional lines of credit for on-lending to the agricultural sector.

In addition, and in the spirit of broad-based economic empowerment, farmer organisations will also be invited to participate in the programme through equity partnership.

The restructuring of Agribank should be completed in six months' time.

According to Mr Nyoni the Government is expected to retain a significant stake in the bank due to its strategic significance.

"The Government will, however, retain a 51 percent shareholding against the background that the bank has a developmental role through its strategic contribution to the economy by supporting agriculture," he said in a statement.

It is anticipated that the restructuring of Agribank will help in improving the bank's capacity to underwrite more business to the agricultural and productive sectors.

It will also assist in the acquisition of a strategic investor that will support Government operations of the bank by providing equity finance and lines of credit and offering other strategic support services such as technical assistance, capacity-building and information technology enhancements.

In this respect SERA has already begun calling for expressions of interests from potential strategic investors.

The appointment of financial advisors for Agribank's restructuring marks a significant step in the process, which observers say has been protracted.

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