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Tinashe Makichi Business Reporter
The takeover of MicroKing by European investors will be concluded by the end of this week with an investment of $25 million expected to be made in January next year. An impeccable source privy to the details of the deal told The Herald Business yesterday that, MicroCred and AfricInvest, are engaged in discussions with the Deposit Protection Board and Grant Thornton over the 100 percent takeover of the micro-finance institution.
“Negotiations are ongoing where the signing of the deal is expected to be done by the end of this week. From the negotiations, the investor has plans to invest about $25 million in the next two years and there are also plans to make MicroKing a microfinance bank.
“The two European companies partnered into forming the consortium that is now engaged in negotiations with DPC and Grant Thornton to take over the micro-finance institution,” said the source. “The parties involved are now finishing finer details of the deal and signing will definitely be done by the end of this week.”
Efforts to get a comment from Depositors Protection Corporation chief executive Mr John Chikura proved fruitless.
AfricInvest was founded in 1994 and is part of Integra Group, an investment and financial services company based in Tunisia. Uniquely positioned as one of the most experienced private equity investors on the continent, AfricInvest has dedicated investment teams focused on North Africa and Sub-Saharan Africa and employs 50 professionals based in six offices.
MicroCred Holding is an investment company that invests in and manages responsible institutions and provides them with the technical assistance they need to become leaders in their respective countries. It provides technical support to the micro-finance institutions in its investment portfolio.
The intention of the two companies to invest in MicroKing is expected to boost the operations of the micro-finance institution.
AfrAsia Zimbabwe has been facing financial troubles since its takeover from businessman Mr Nigel Chanakira and this triggered a series of events which culminated in the financial institution surrendering its licence in February this year. The Reserve Bank of Zimbabwe eventually cancelled the bank’s licence and placed it under provisional liquidation with the DPC being appointed liquidator.
The development left the group’s two other units MicroKing, which has been put up for sale, and AfrAsia Capital Management which still has an uncertain future. Government in March this year expressed its intention to rescue MicroKing after visiting United Kingdom secretary for international development; Mark Lowcock raised fears over British investment in the institution.
The Department for International Development of the United Kingdom had $800 000 investments in MicroKing and investors both foreign and local have been keen to invest in the unit considering that it was one of AfrAsia’s profitable units.
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