“The next step is for government to float a tender for the strategic partner and this is envisaged for implementation during the second quarter of 2012,” said Biyam.
Finance minister, Tendai Biti, last year announced that government, which holds majority shareholding in the bank, would offload its shares in the bank to make it more competitive.
This decision followed cabinet authorisation for the cash-strapped institution to seek a new partner.
Government approved a privatisation plan for the bank where a strategic partner would buy 49% equity with government retaining 51% of the same.
Biyam said that government floated a tender in mid-March for financial and legal advisors as part of the bank’s privatisation.
The government has repeatedly sought a suitable partner for the bank as it continually recorded losses over successive financial periods because it loaned the bulk of its cash to the low performing agricultural sector.
The plan to privatise Agribank is part of the government’s strategy to create private-public sector partnerships that can help resuscitate and recapitalise its loss-making parastatals.
The bank recorded a loss after tax of US$286 409 for the year ended December 31 2011 compared to a loss of US$8,1 million in 2010.
The reduction in loss was attributed to a growth in operating income, which increased by 82% from US$10,6 million in 2010.
“The turnaround and strong performance also partly reflected the positive impact of the Industrial Development Corporation SouthAfrica (IDCSA) line of credit of US$30 million, which was disbursed in 2011,” said Biyam.
The facility was disbursed to local companies on the basis of a criteria supporting increased local manufacturing capacity, creation of jobs and more local goods on the market, and this consequently had a positive impact on the bank’s profile.
The bank presently anticipates more new lines of credit this year.
Biyam said the bank was currently negotiating with IDCSA for a second tranche worth US$30 million, which is expected to be disbursed during the second quarter of 2012, focusing on increasing capacity utilisation and job creation.
Companies in the agricultural, manufacturing and tourism sectors would be the main beneficiaries.
The facility has a six-year tenor with concessional interest rates.