NMBZ shareholders approve placement of shares to offshore investors

Published: 10 June 2013

NMBZ shareholders, unanimously voted for all the seven resolutions at an EGM held early this morning paving way for injection of new capital by offshore strategic institutional investors.

Chairman Tendayi Mundawarara said "the directors are proposing to consolidate the share capital by a factor of 10 to reverse the effect of hyper-inflation and to authorise ordinary share capital. On the other hand, the proposed share capital increase is meant to accommodate fundraising issue."

He further highlighted that to ensure compliance with the minimum capital requirements in a manner that adds value to the company while minimising dilution, NMBZ developed a capitalisation plan which was approved by the RBZ.

NMBZ has secured new capital from 3 strategic foreign investors that have agreed to inject $14.8 million into the group in exchange for 26.97% stake.

These investors are Tunisian-based AfricInvest Capital Partners, Dutch Development Bank FMO and Norfund which is a Nowergian development finance institution.

The first phase was the proposed $14.8 million equity injection by two development finance institutions FMO and Norfund and the equity investment has a conditional buyback option.

"Subject to your approval the company will provide an exit mechanism through the proposed share buy-back options which if exercised and fulfilled by NMBZ have the effect of reversing the dilution to be suffered by shareholders from the proposed equity placement," he said.

CEO James Mushore at an analyst briefing last week said the buyback option is exercisable from 5th and 9th anniversary provided there are excess reserves over and above the minimum regulatory capital requirements.

Mundawarara added that directors and management "believe that the terms of the proposed placement are in the best interest of the company and the shareholders."
- zfn