20 June 2014

Zimbabwe: ABC Set to Benefit From Fundraising

Listed financial institution ABC Holdings is set to benefit from the second fundraising done by soon-to-be major shareholders Atlas Mara. The Atlas Mara group is said to have raised in excess of $300 million on the international market although the fundraising has not yet closed. An official announcement is expected at the end of June.The amount raised so far falls short of the $400 million target but all the same ABC will strengthen its balance sheet with the some of the capital. However, indications are that the capital will be used to grow the Atlas Mara portfolio in Africa.

Last month, Atlas Mara announced the acquisition of a 77 percent shareholding in the Development Bank of Rwanda.

After failing to reach its fundraising target, Atlas Mara could raise debt in the next few months, rather than equity, to finance acquisitions.

Mr Bob Diamond has made clear that the acquisition spree was not over, saying in March: "This is the beginning . . . Watch this space."

Rival bankers and investors believe that Atlas Mara's next acquisition is likely to be in the prized -- but expensive -- West African market, home of Nigeria, the continent's largest economy.

Sub-Saharan Africa is attracting bankers because most of the region's population of about 1 billion do not use banking services.

Only a quarter hold a bank account and fewer than 5 percent have a credit card.

At the same time, though, the region is enjoying its best economic expansion in a generation.

Mr Diamond set up Altas Mara last year in partnership with Mr Ashish Thakkar, the 32-year-old head of Mara Group, a conglomerate with operations in 19 African countries.

Mr Diamond and Mr Thakkar personally invested $20 million in the venture and they invested again more funds in the second fundraising.

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