NMBZ says the sale of its shares to three strategic foreign partners would help open the windows to credit lines for lending to various sectors of the economy.
BY NDAMU SANDU
Last week NMBZ shareholders approved a private placement to three investors — Norfund, AfricInvest and FMO — a move that would raise fresh capital for its flagship arm, NMB Bank.
NMBZ group chief executive officer James Mushore told Standardbusiness that the approval of the private placement meant the bank was adequately capitalised and would leverage that to get more lines of credit. He said the new shareholders joining the group were of repute and this helped in unlocking the keys to the lines of credit.
“The effect of this [private placement] is to enhance our shareholder profile. We have names that are recognised by European institutions. When we go to look for money, they say who are your shareholders? Who is on your board of directors? What this will mean is that it will help us raise more lines of credit,” Mushore said.
In the six months to June last year, NMBZ said it had secured a US$6 million agricultural credit line for companies that dealt with communal farmers such as agro dealers, agro processors, wholesalers or butcheries.
The private placement would be consummated through the issuance of 103 714 287 ordinary shares to Norfund, AfricInvest and FMO at a price of US$0,1430 per share. The strategic investors would have 8,38% apiece in NMBZ. Each investor would then nominate a representative to the NMBZ board.
The coming on board of the three strategic partners would raise US$14,8 million to help NMB Bank meet the US$50 million minimum equity capital deadline for commercial banks by June 30.
Asked what had attracted the three institutions, the NMBZ boss said the investors must have liked the project and had confidence in management. He said the group would also set up a leasing business.
NMBZ disposed of its 24,79% stake in African Century Leasing to raise additional capital to recapitalise the bank.
The leasing business alongside advisory is one of the new units to be added to the group.
Mushore said the demand was phenomenal on the leasing side and the group would mobilise lines of credit to support the unit.
NMB Bank is strong in its corporate banking unit where it targets huge corporates and high net worth individuals. It recently ventured into bancassurance to drive more revenue for the bank.
Mushore said the bank would launch the upgrade of its internet banking by June.
“We launched bancassurance looking now to get more on advisory services. With the impetus that is happening in the economy, there are a lot of opportunities in terms of corporate restructuring and fundraising, particularly in infrastructure which has been neglected over the years,” Mushore said.
“It’s already there. It’s a question of getting mandates.”
Last week’s extraordinary general meeting of shareholders approved a share buy-back option where the three foreign investors could exit the group after it had attained its growth objectives.