Wednesday, July 24, 2024

ABC Holdings looking to raise P800m to supplement 2012 rights issue

ABC Holdings Limited, the Botswana Stock Exchange (BSE) quoted pan African banking outfit, said it is looking to beef up its war chest by raising close to a billion Pula this year as it aims to expand its retail footprint across its operations.

The bank — previously focused on merchant banking — is enjoying its chance in the consumer banking space and wants to be a top banking house in the markets it competes in, including Botswana.

ABC Group Chief Executive Officer, Douglas Munatsi, said they will be looking to raise $US 100 million (about P827.8 million) tier two capital this year to compliment the cash they raised from rights issue last year.

He told Sunday Standard the move will be to dilute cost of raising equity capital through debt as equity tends to be quite “expensive”.

“We are talking to a number of funders and partners to raise capital,” Munatsi said during the presentation of the company’s full year results December 31, 2012.

“We are looking at all options,” he added, saying the funders could include Development Finance Institutions (DFIs).

Last year, the bank successfully raised US $ 50 million (about P413.9 million) through a rights issue, which resulted in an additional 83, 333, 333 shares issued to existing shareholders and the under-writer.

The move increased the number of shares in issue to 232, 805, 464 with the proceeds distributed to subsidiaries.

Following the rights issue, there were changes within the shareholder base which saw the German listed African Development Corporation (ADC) taking direct shareholding of 41.7 percent and become anchor shareholder.

ADC then agreed to warehouse additional shares as a financing mechanism for the executive management team as a result its effective shareholding will be 50.4 percent.

Partners that ABC Holdings will be looking for include traditional ones, like International Finance Corporation (IDC)ÔÇöthe World Bank’s investment arm, which is already assisting the bank draw up an SME product offering.

ABC has previously had dealings with IFC including the issuing of a convertible loan in 2011 whose fair value sits at P106 million now compared to P84.6 million at the time it was issued. The bank has also previously borrowed from local financial institution.


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