BancABC to launch rights issue
by Zeph Kajevu
BancABC will launch a Rights Offer to shareholders to raise US$50 million to fund further expansion of its retail network in selected markets, Group CEO, Douglas Munatsi, has said.
According to Munatsi, the Rights Offer will see an additional 83,333,333 ordinary shares being offered to existing shareholders. With a value of US$ 50 million (about P356, 666 666), the funds raised will enable ABC Holdings Limited to continue the rollout of retail branches, which began in 2009 and has seen BancABC opening 53 branches to date, with the aim of ending the year with a total of 72 branches across its regional footprint.
“The price of the available shares has been set at US $ 0.60 (60 US cents) or BWP4.28 with the offer price being based on the average quoted trading price per share during the last three months,” Munatsi said in a June 22 press release. “The Rights Offer will open on June 8 and close on July 27, 2012.”
Shareholders will be entitled to subscribe for the new shares at a ratio of one Rights Offer share for every 1.79 shares held on the record date of May 30, 2012.
The new shares will rank equally with the existing issued ordinary shares offering holders full participation in distributed profits and capital. They will also rank equally with existing ordinary shares with regard to voting.
“During the last few years, the Group has made a substantial investment in the required systems, people and distribution channels required to expand its offerings and move aggressively into providing banking services for all, including the SME segment of the market,” said the Group CEO.
The bank has been able to fund this expansion from internal resources. However, in order to build on the significant success that has been achieved to date, additional capital needs to be injected into the business.
“Hence the rights issue, which is intended to enable our existing shareholder base to follow their rights and participate in BancABC’s future growth. The funds received from the Rights Offer will be spread across all the markets in which the bank is active to increase our presence and market penetration. It is intended that the two major portions will go to Botswana and Zimbabwe (US $ 15 million each), with Tanzania and Zambia being allocated US $ 7 million each and Mozambique US $ 3.5 million,” said Munatsi.
The Rights Offer is being underwritten by ADC Financial Services and Corporate Development Limited. ADC is already a significant shareholder of ABC Holdings with 23.4 percent shares. The Botswana Stock Exchange (BSE) has given a preliminary waiver of the requirement to make a mandatory offer to minority shareholders in the event that ADC’s shareholding increases to 35 percent or more.
ABC Holdings Limited is the brand name of the company registered in Botswana, which has a primary listing on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange.
BancABC operates in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe and has a group services office located in Johannesburg, South Africa.
Historically, BancABC was a merchant bank offering a diverse range of services. These included wealth management, corporate banking, treasury services, leasing, asset management and stock broking. The Group is now expanding into the retail space.
BancABC’s vision is to become Africa’s preferred banking partner by offering world-class financial solutions.