adminThe move was necessitated by the acquisition of a 35 percent stake in the financial services group by Mauritian-based banking group, AfrAsia following its injection of $9,5 million into KFHL early this year.
In a statement, the group’s chairperson Ms Sibusiwe Bango said the change of name would be effected as soon as outstanding regulatory notifications have been made while additional capital would comprise $50 million in debt and $150 million in offshore lines of credit.
She said the additional capital would strengthen the capital adequacy of its largest operating subsidiary Kingdom Bank Limited (KBL).
This is expected to lower KBL’s risk profile and enhance the bank’s ability to raise more deposits on the local market.
“KBL is currently unable to fund a strong deal pipeline due to the liquidity constraints that characterise the Zimbabwean market since the dollarisation of the economy in 2009. Enhanced liquidity through more deposits, along with the term funding provided by the debt capital as well as lines of credit, will allow KBL to grow its loan book, underwrite new business and promote general corporate expansion in line with the group’s growth strategy,” she said.
Ms Bango said the Extraordinary General Meeting (EGM) held on 9 September 2011 approved the raising of debt capital amounting to $10 million.
However, she said it had become imperative that the group embarks on raising a significant amount to capitalise its businesses to the changed operating environment and increasing competition in the financial services sector.
On the group’s relisting, she said: “While the rights issue and private placement processes have been finalised, the other phase of raising debt capital is still being pursued. As such, timing of the re-listing of Kingdom is intricately linked to conclusion of this ongoing capital raising initiative aimed at shoring up the group’s balance sheet.
“It is the board’s considered view that listing should happen once the company is on a stronger financial footing so as to preserve shareholders’ value. In terms of the authority given to it at the EGM held on 9 September 2011, the board will make appropriate announcements to stakeholders once the conditions for listing of the company are ripe.”
The group’s chief executive Mrs Lynn Mukonoweshuro said KBL plans to expand its market share by taking advantage of existing and emerging business opportunities.
“Our capitalisation, which was strengthened by our recent partnership with AfrAsia Bank Limited, will be further enhanced when the planned initiatives to raise additional capital are completed.
“We are both excited and optimistic about our ability to exploit the growth opportunities that are available and I am confident that with the support of our shareholders, customers and staff we will succeed,” said Mrs Mukonoweshuro.
Online Reporter