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AfrAsia US$5m rights issue fully subscribed

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AFRASIA Zimbabwe Holdings says its US$5 million rights issue was fully subscribed as the financial group continues with fundraising efforts to fund growth and meet regulatory requirements.
This will help ease a liquidity crunch that forced its banking unit AfrAsia Bank Zimbabwe to cap intermittent cash withdrawal at US$300 in a bid to manage cash shortage.

The banking unit, which had US$7,94 million capital as at September 2013 against expected capital of US$25 million in by December last month, was among troubled banking institutions that were put under the surveillance of the Reserve Bank of Zimbabwe.

The rights issue launched as part of a phased capital raising plan to bolster the group’s balance sheet and capital position received shareholders’ approval at an Extraordinary General Meeting held in November last year.

“Shareholders of AfrAsia Zimbabwe Holdings Limited (AZHL) fully subscribed to the group’s recent US$5million rights offer as AZHL continues with its efforts to raise capital to fund growth and comply with regulatory requirements,” the group said in a statement released yesterday.

The first phase of this plan was to raise US$20 million split into a rights issue of US$5 million and a private placement of shares to raise US$15 million.

The rights issue closed on the December 31 2013. AfrAsia Bank Limited followed its rights and still remains the significant shareholder in the group.

AfrAsia said the private placement is still underway and it is expected to close soon, after which the group will provide a further updater on the final shareholding structure.

“The successful subscription of the rights issue is a testimony of the bright prospects of where we are going as a group.

“We are progressing well in our capital raising efforts and grateful for the continued support in the business by our shareholders,” said group chief executive Mrs Lynn Mukonoweshuro said

The group said it was glad that the liquidity situation is normalising and it is monitoring its branches daily to ensure that they are adequately funded to meet clients’ needs.

AfrAsia Bank Limited clients have also not been able to access their cash on some automated teller machines with the group attributing the problems to a systems upgrade programme.

The group said its major shareholder; AfrAsia Holdings Mauritius has increased liquidity support to the bank recently, which the group said amounted to about US$25 million when it held its extraordinary general meeting late last year.

AfrAsia Bank, which has its eyes on, ultimately, raising a total of US$100 million, stands in good stead of getting significant liquidity supported from its deep pocketed Mauritian shareholders.

“The Group is in the book building phase to broaden the prospects of strengthening its financial position by offering potential investors preference shares.

“Investor response has been extremely positive. The exercise will be soon completed and we will announce the results accordingly,” AfrAsia Bank Limited managing director Mr James Benoit said.

The financial services group recently rebranded from AfrAsia Kingdom Holdings to AfrAsia Zimbabwe Holdings Limited with AfrAsia Bank Limited  as the major shareholder.

The group’s banking and asset management subsidiaries have been re-branded to AfrAsia Bank Zimbabwe and AfrAsia Capital Management Limited respectively while MicroKing Finance has retained its name for strategic reasons.

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