6 September 2013

Zimbabwe: Chanakira Sells Shares, Exits Afrasia Kingdom Bank

PROMINENT local banker and entrepreneur, Nigel Chanakira has left AfrAsia Kingdom Zimbabwe Limited which he co-founded in the 1990s and helped develop into a leading indigenous bank.

The group confirmed Friday that Chanakira was giving up his 30 percent shareholding to Mauritius-based AfrAsia Holdings Limited in a cash and equity deal that would see him take-over AfrAsia's 35.7% interest in the company's Botswana unit.

AfrAsia moved into Kingdom in January 2012 after acquiring a 35 percent stake for about US$9.5 million as the bank looked for new investment to in order meet statutory minimum capital requirements.

Under the terms of the deal announced Friday, Chanakira was would immediately step down as a director while his Crustmoon Investments also exits the banking group although he was handed the "Kingdom" Trademark.

AfrAsia also announced plans to raise additional liquidity support through a US$20 million rights issue while Kingdom Bank would be renamed AfrAsia Bank Ltd and the group rebranded as "AfrAsia Zimbabwe Holdings Ltd".

Chanakira said he was sad to leave the bank which he co-founded and helped develop to become a key player in the local financial services sector.

"I have particularly been delighted to have been part of this Group which has and continues to be a respected player in the financial sector in Zimbabwe. However, in life sometimes one is confronted with major decisions that shape your future, and for me, this is that one moment," he said.

"I will (however) remain invested in the financial services sector through Botswana based Kingdom Bank Africa Limited and will be exploring opportunities in Zimbabwe and the region.

"I wish to thank God for this major breakthrough and especially President Mugabe, Reserve Bank Governor Gideon Gono, his banking supervision team led by Norman Mataruka and all stakeholders of AfrAsia Kingdom Zimbabwe Ltd during this very delicate process. I will personally retain Kingdom Bank as my principal bankers."

Speculation that Chanakira would leave the group emerged in July this year after Kingdom Bank was forced to write-off a huge chunk of a US$21 million non-performing loan extended to struggling local telecoms firm.

The banker insisted, at the time, that he was staying put, adding the $21 million bad loan and efforts to find a solution to the problem had been approved by the bank's board and regulatory authorities.

Meanwhile, AfrAsia chief executive James Benoit said the time was write for a major restructuring of the group.

"The timing is now appropriate for us to unify the brand under which our Zimbabwean operations are managed, and we are confident that the AfrAsia brand will soon come to represent an innovative, disruptive and highly professional banking franchise in Zimbabwe as it already does in Mauritius and South Africa," he said.

"Chanakira has played a pivotal role in the development of our franchise in Zimbabwe and has been instrumental in developing the plans for the restructuring that is now underway. We are deeply grateful to him for his efforts in this regard and look forward to a continued relationship with (him) in his new endeavours.

"I am satisfied with the outcome of this restructuring exercise and confident AfrAsia will now take up the banking, microfinance and asset management business to new heights both in Zimbabwe and the region for the best of customers and the industry."

Chanakira and his business partners established Kingdom Bank in 1994 and listed the group on the Zimbabwe Stock Exchange (ZSE) in 1999 through a merger with The Discount Company of Zimbabwe.

The bank also expanded into the region before merging with listed leisure and retail group Meikles Limited in 2007 to create one of the country's largest companies in Kingdom Meikles.

The union however, hit to rocks in 2009 following a fallout between Chanakira and Meikles chairman John Moxon which led to the demerger of the bank from the Kingdom Meikles group in 2011.

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