Atlas Mara takes over BancABC, will immediately inject $100m

Published: 02 April 2014

ABC Holdings (BancABC) expect $100 million equity capital injection from Atlas Mara soon after the deal is concluded with the transaction expected to transform the Pan African banking group, CEO Doug Munatsi told a press conference last night.

Munatsi was joined by founding Partners of Atlas Mara Bob Diamond and Ashish Thakkar to announce Atlas Mara's imminent takeover of BancABC.

"What we have is a partnership we believe will take this group to the next level," said Munatsi.

He said the investments by Atlas Mara will unlock more capital for the group "to support the subsidiaries and the business."

"Unless you have access to capital your growth is going to be either stunted, limited, or as we know in Zimbabwe sometimes it may pronounce your end," he added.

The new investor will gives the group access to liquidity as well as tier 2 capital and lines of credit.

"It opens totally expansive opportunities for our group within and beyond our current foot print. The transaction will also bring potentially significant network, not just for money, but for building relationship that Bob and Ashish have developed in developing their own businesses," he noted.

He went on to say he has had "a little glimpse into some of those networks" and has looked at them and "they look good."

Diamond, during his brief speech, said he is aware of the economic challenges in Zimbabwe but went on to say he believes they are being managed in a positive way.

He said they are going into banking for the long term and not for a short period.

"There are three things we can bring to help take BancABC and financial services in Africa to another level, the first of which is capital, liquidity and funding," he said before adding that he doesn't know of any African bank that has enough of the those elements.

Atlas Mara will also bring new technology: "We are talking technology which underpins an African bank in multiple countries, for example technology that will allow us to do straight through process with our customers and our clients, but also allows us to grow and scale up, and allow us to stay in control with the regulation."

Another element they are bringing to the table is talent with Diamond saying "if we don't have the best talent in Africa we will not achieve our ambitions."

"We are bringing the ability and willingness to attract and retain the best talent because the team with the best talent and team work will win," said Diamond

He said there also opportunities to expand their platforms.

"We can bring capital market platforms, specialized lending platform s to agriculture, corporate and investment banking platforms and more sophisticated foreign exchange connectivity."

"As Atlas Mara we aim to be the leading financial services organization in Africa, that doesn't mean the biggest but the best."

He said BancABC is the first transaction for Atlas Mara and he also said the attraction was that the group operates in multiple countries in Southern Africa, has a high level of earnings already with a superior management team.

According to Diamond the vast majority of investors in Atlas Mara at its initial public offering in December 2013 came from the US and for the largest percentage of them this is their first investment in Africa.

He said this shows that US investors are beginning to seriously consider Africa as an investment destination adding "there's going to be many more investments into Africa from Americans in future."

Thakkar said Atlas Mara is not an investment fund but a strategic investor.

"Apart from bringing access to capital, liquidity and funding we are going to be strategic in terms of how we can bring new innovations, services and products into the market," he said.

He said their investment will cause "positive disruptions to the continent and that disruption will be beneficial to Governments, countries and for the people."
- zfn