31 August 2014

Ethiopia: Bank of Abyssinia Purchases Br400 Million Headquarters

The Bank of Abyssinia (BoA) has bought a 15 storey unfinished building for 400 million Br from Saca Plc - a sister company of Ayat S.C.

The deal was finalised in July and the two are currently working to transfer the building, according to Addisu Haba, the Bank president who will be replaced by Mulugeta Asmare as acting president on September 1, 2014.

The building, in front of the Ethiopian Insurance Corporation of (EIC) Lagar branch - on the intersection of Gambia and Ras Mekonnen street - is 60pc complete. It lies on a 2,900sqm plot of land and has 15 floors with two basements. The building has a floor area of 33,400sqm.

The ground and the first floor of the building are rented to the Nib and United banks, as well as the United and Abay insurance companies. There are also the offices of Ethiopian Airlines and Saca and Ayat Real-Estate.

Abyssinia will use the building for its headquarters and rent the remaining space, says Mulugeta Asmare, vice president of the Bank. The bank will make changes to the interior design of the building, he says.

Saca Plc, engaged within automotive and car sales, is a sister company of Ayat, which was previously managed by the now incarcerated Ayalew Tessema. Before becoming a share company, Ayat, established in 1996 with a total capital of five million Birr, was a private limited company. Ayat was the first private business organisation to appear in the real-estate development sector. It also operates in others areas, such as the production of construction materials, machinery lease, agro-industry, hotel and tourism, import & export and education.

The founder and managing director of the company, Ayalew, has been in prison since 2010, serving a 12 year sentence for money laundering and tax evasion by transferring vehicles and machinery imported duty free to third parties. He was sentenced in May, 2013.

"The remaining 40pc of the construction will be done by the Bank," said Addisu.

The administration of Saca declined to comment on the issue, stating that it is in the process.

The BoA was established in 1996 by 131 shareholders and 32 staff workers, with an authorised and paid up capital of 50 million Br and 17.8 million Br, respectively. Currently, the Bank has 103 branches across the country with 1.5 billion Br in authorised and 929.3 million Br in paid up capital, with a total deposit balance of 9.4 billion Br. The bank has provided total loans and advances of 5.3 billion Br and currently employs 2,800 staff members. The bank has 1,515 shareholders and 400,000 account holders.

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