Bid to buy out BancABC directors stalls

ATLAS Mara says it has experienced some administrative glitches in acquiring the shares held by three BancABC departing executives but hopes to tie up the deal next month.

BancABC founding chief executive officer Dough Munatsi, chief operating officer Francis Dzanya and chief finance officer Beki Moyo are leaving the banking group at the end of the month following the acquisition of a controlling shareholding by Atlas Mara in August.

"Following the announcement on 9 December 2014, Atlas Mara Co-Nvest Ltd (Atlas Mara) announces that it has experienced administrative delays in completing the purchase of the Atlas Mara shares from the departing managers of ABC Holdings Limited (BancABC)," Atlas Mara said. "The purchase, which was expected to be complete on 15 December 2014, is now expected to be completed in January 2015."

In August Atlas Mara — co-founded by ex-Barclays Plc chief executive officer Bob Diamond and entrepreneur billionaire Ashish Thakkar — completed the acquisition of 95,84% in BancABC as part of its efforts to establish a premier financial services group in sub-Saharan Africa. It further increased the shareholding to 98,7% last month after buying out some minorities.

Munatsi, Moyo and Dzanya received a total of 1 743 888 Atlas Mara shares in consideration for the transfer of their shares in ABC Holdings at the time of the completion of the BancABC acquisition.

As part of the exit deal, Atlas Mara agreed to purchase the shares held by the trio at a price of $10 per share.

The repurchased shares will be held in treasury. In addition, the three were granted options over a total of 1 521 838 ordinary shares. The options have a strike price of $12 per share and are also subject to certain repurchase obligations.

These options were previously agreed with the management team at the time of the initial acquisition of BancABC.

BancABC is set to incur a one-time net charge to income of approximately $5,8 million in the fourth quarter of 2014 in connection with the departure of the three executives.

Atlas Mara is also actively evaluating "fill-in opportunities in countries where BancABC can become a top three to five player through inorganic growth".
In Zimbabwe and Botswana, BancABC is in the top five in terms of market share.

It is sixth and seventh in Zambia and Mozambique respectively and a distant thirteenth in Tanzania.

Atlas Mara sees BancABC as fast-growing, adding that it was hampered by capital constraints. Atlas Mara has also promised to continue engagement with development finance institutions to secure competitive funding to reduce average cost of funding.