30 January 2013

Zimbabwe: Agribank's Due Diligence Process Starts

AGRIBANK chief executive officer Mr Sam Malaba says financial and legal advisors, who were appointed to spearhead the bank's privatisation, have begun the due diligence process which is expected to end late January or mid-next month.

Mr Malaba said once the due diligence process has been completed potential bidders would then be invited.

"As you are aware, the financial advisors and legal advisors were appointed late last year and they have commenced the due diligence process which is likely to be completed by end of January or mid-February at the latest.

"Thereafter, the Information Memorandum and Invitation to potential bidders is earmarked for mid-May with the actual privatisation process scheduled for completion by end of September 2013," said Mr Malaba.

The financial advisors are Musa Capital and Neverseez Capital, while the legal advisors are Sawyer and Mkushi. The two financial advisors arranged the deal that saw Agribank getting a US$30 million facility from the Industrial Development Bank of South Africa that was unveiled in 2011.

It could not be immediately established if the two companies are also behind the new US$30 million facility from IDCSA.

Plans to find a strategic partner for Agribank have been on the cards for a long time and analysts believe it was important for the deal to sail through so that the investor can help recapitalise "one of the country's most crucial banks".

While economic analysts have supported the privatisation of Agribank saying it would capacitate the bank, most farmer organisations have opposed the move suggesting the investor may not be keen to support the country's land reforms, leading to massive food insecurity.

However, Mr Malaba said inasmuch as stakeholders' concerns that a privatised Agribank may not support agriculture are legitimate since farming is "at the heart of Government's overall economic recovery strategy", there was no need to press the panic button.

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