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The new investors -AfricInvest, Norfund and FMO – would each inject US$5 million for a total of 103 million shares while Norfund will advance a further US$1,4 million as a line of credit.
The fresh capital injection is expected to increase the bank’s capitalisation to about US$43 million as the bank rushes to reach the regulatory minimum of US$50 million by June 2013.
The Reserve Bank of Zimbabwe initially wanted commercial banks to increase capital, in phases, to US$100 million by June 2014, but relaxed the conditions. Banks have now been asked to submit, for consideration by the RBZ, their plans on how and when they would comply with the minimum capital thresholds.
NMBZ group chief executive Mr James Mushore said the bank had presented a recapitalisation plan that would see it reach the US$100 million capital level by December 2015.
The fresh capital injection would enable the bank to underwrite more business and enable it to trade into compliance with the June 2013 deadline.
“What this means to the bank is that we have almost doubled in size and with that we should now be able to raise more lines of credit,” said Mr Mushore.
NMBZ could only raise a maximum of US$15 million equity finance because anything above that would take the level of local ownership above the prescribed levels.
The Indigenisation and Economic Empowerment Act stipulates that local shareholders should have a minimum of 51 percent stake in a local company.
Prior to the latest deal, the top five shareholders in NMBZ were Old Mutual (20,93 percent), LES Nominees (14,72 percent) , African Century Financial Services (9,97 percent), Lalibela (7,65 percent) and Alsace Trust (6 percent).
Speaking after the signing ceremony, AfricInvest founding partner Mr Ziad Oueslati said the investment would give the bank more resources to grow.
“My first visit to Zimbabwe was in 2009 and we saw a lot of good things; a population that is highly educated and an economy that was starting to grow,” said Mr Oueslati.
“At that time we decided that it was about time that we invested in Zimbabwe. Of course, as investors we are looking to generate profits, but what we are looking for, the most, is to impact the local community and the economy.”
He said the best way to achieve their objective was through investing in a bank and after considering the options, they settled for NMBZ Bank. But he pointed out that while this was their first investment, it was “certainly” not the last.
While not ruling out further investment in the financial sector, Mr Oueslati said they would consider other sectors, such as agri-processing, fast-moving consumer goods and health and education, among others.
Mr Mushore said the investment would enable NMBZ to raise more debt and target sectors of the economy that for a long time had been neglected.
He said the bank would increase its funding to small to medium enterprises, adding that with longer term lines of credit they would also be able to fund agriculture and mining, which cannot be financed from short-term funds.
AfricInvest, a Tunisian private equity firm; FMO, a Dutch development financial institution; and Norfund, a Norwegian investment fund for developing countries; would each get an 8 percent stake in NMBZ Bank Limited.
Online Reporter