MOZAMBIQUE – London-based Atlas Mara Limited is set to sell a 100 percent stake in its Mozambican banking subsidiary to Nigeria’s Access Bank.
Kenya’s Equity Group had signed an agreement with Atlas Mara to buy 62 percent of the share capital of Rwanda’s Banque Populaire du Rwanda, 100 percent of African Banking Corporation of Zambia, African Banking Corporation Tanzania and African Banking Corporation Mozambique.
The Kenyan banking multinational later decided to terminate the deal citing increased risk from the outbreak of the Covid-19 pandemic.
Equity would have also been required to inject additional capital into the banks most of which are in losses.
Atlas Mara says it has reached a new deal to sell BancABC Mozambique to Access Bank, adding that more divestitures could follow.
“This transaction with Access Bank is an important step in our broader repositioning of the group as a streamlined holding company, with an increased focus on core markets,” the company said in a trading update.
“In addition to the transaction announced, the company continues to evaluate a number of strategic options which may include additional divestiture or partnership transactions, or other alternatives that align with these and other objectives for the benefit of Atlas Mara.”
The company added that it has evaluated indications of interest from a number of potential partners and transaction counterparties.
Access Bank will pay Atlas Mara upfront cash on the deal completion date equivalent to 80 percent of BancABC Mozambique’ net assets as of June 30, 2020.
It will make additional cash payments two years later subject to certain conditions.
The deal marks the latest expansion for Access Bank which recently spent $14 million to acquire Kenya’s Transnational Bank.
Equity had agreed to pay for the four Atlas Mara banks by issuing a 6.72 percent stake valued at about $ 100 million to the London-listed firm in the deal that was cancelled after 14 months.
The Kenyan bank, however, proceeded with the purchase of a controlling 66.5 percent stake in Banque Commerciale Du Congo (BCDC) in a $100 million cash transaction that was completed in August.
The abandoned deal with Atlas Mara was part of Equity’s ambitious regional expansion plan that has been put on hold in the wake of the pandemic with the bank going into capital-preservation mode.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE