Nigel Chanakira sells his AfrAsia Kingdom Zimbabwe stake

Published: 06 September 2013

Kingdom Bank founder Nigel Chanakira has disposed his 30% indirect interest in AfrAsia Kingdom Holdings Ltd that is owned by his family's investment vehicle Crustmoon Investments (Pvt) Ltd.

This was revealed in an announcement to shareholders by Afrasia Kingdom Holdings.

In July, Chanakira refused to step down from the board of AfrAsia Kingdom Holdings Ltd, the holding company that controls the bank.

This come in the wake of speculation in the market that the relationship with his partners - AfrAsia Ltd - could have soured after the bank was forced to write-off part of the $21 million bad loan.

Full statement from Afrasia Kingdom Holdings Limited below.

AKZL will in turn be selling the remaining AKZL interest in the Botswana-based offshore bank, Kingdom Bank Africa Limited to Crustmoon Investments. The restructuring, when completed, will result in Crustmoon exiting completely as a shareholder of AKZL and in the transfer of the AKZL's 35.7% interest in KBAL

Chanakira will also step down as director of all AKHL and AKZL entities with immediate effect of the restructuring. Mr. Chanakira will however acquire the "Kingdom" Trademark from AKZL.

Further to the restructuring, AfrAsia Holdings Ltd as announced:

• The immediate provision of additional liquidity support to AKZL and KBL, a US$20 million rights issue to be to be led by AfrAsia, details of which will be released in due course;
• The rebranding of AfrAsia Kingdom Zimbabwe Limited as "AfrAsia Zimbabwe Holdings Ltd"; Kingdom Bank Ltd as "AfrAsia Bank Ltd"; and Kingdom Asset Management (Pvt) Ltd as "AfrAsia Capital Management (Pvt) Ltd";
• The restructuring of the board and management of AKZL and KBL, details of which will be finalised and announced in due course.

Chanakira said as a founding shareholder of AKZL, it has not been an easy decision to leave the Group. However, he said he had been persuaded by new and emerging opportunities that have been created in the financial services sector to pursue interests outside AZKL. "I have particularly been delighted to have been part of this Group which has and continues to be a respected player in the financial sector in Zimbabwe. However, in life sometimes one is confronted with major decisions that shape your future, and for me, this is that one moment," said Chanakira.

Chanakira said he is comforted by the fact that he is leaving the Group in good hands and with a solid shareholder base who has the same vision he had when he founded Kingdom. "I will remain invested in the financial services sector through Botswana based Kingdom Bank Africa Limited and will be exploring opportunities in Zimbabwe and the region," said . Chanakira. "I wish to thank God for this major breakthrough and especially President Mugabe, Reserve Bank Governor Gideon Gono, his banking supervision team led by Norman Mataruka and all stakeholders of AfrAsia Kingdom Zimbabwe Ltd during this very delicate process. I will personally retain Kingdom Bank as my principal bankers."

James Benoit, the Chief Executive Officer of AfrAsia, stated that "The restructuring and recapitalization of AKZL is confirmation of our commitment to Zimbabwe and our belief in its recovery potential and the key role that it can play in regional development going forward. Kingdom Bank under AKZL already represents one of the best banking franchises in the country and we are committed to further developing it into the top bank in Zimbabwe, which we are confident that we can do given that we now expect a more stable business environment going forward. I would also like to place on record our thanks to H.E. President Robert Mugabe and to Reserve Bank Governor Gideon Gono and his team for their support"

Benoit said with AfrAsia's growing presence in the region and the increased volume of trade and investments going into Zimbabwe, this exercise further demonstrates AfrAsia's commitment to tap into the African market and be instrumental in their plans to further identify and enhance the untapped synergies in the region.

On the impact that such investment would have on present customer dealings, Benoit also declared that "It is business as usual as the AfrAsia Bank Group grows from strength to strength. Everything is being made in the best interest of all our stakeholders with careful risk assessment as we seek to seize opportunities in the region with the backing of our shareholders and partners while meeting regulatory requirements."

Benoit said: "Chanakira has played a pivotal role in the development of our franchise in Zimbabwe and has been instrumental in developing the plans for the restructuring that is now underway. We are deeply grateful to him for his efforts in this regard and look forward to a continued relationship with Chanakira in his new endeavors. I am satisfied with the outcome of this restructuring exercise and confident AfrAsia will now take up the banking, microfinance and asset management business to new heights both in Zimbabwe and the region for the best of customers and the industry."

"The timing is now appropriate for us to unify the brand under which our Zimbabwean operations are managed, and we are confident that the AfrAsia brand will soon come to represent an innovative, disruptive and highly professional banking franchise in Zimbabwe as it already does in Mauritius and South Africa" said Deputy Chief Executive Officer of AfrAsia Bank Ltd, Kamben Padayachy.

AfrAsia Corporate Finance is acting as exclusive adviser to AfrAsia with regards to the restructuring exercise and as co-adviser with Cosmos Capital to AKZL with regards to the Rights Issue.

- businessdaily