Financial services group Atlas Mara has announced plans this week to sell off several banking assets.
Atlas Mara said it will trade off its banking operations in Rwanda, Zambia, Mozambique and Tanzania for a 6,27 percent stake in Kenya’s biggest bank by market value, Equity Group Holdings Plc.
“Atlas Mara Limited announces that it has entered into a binding term sheet with Equity Group Holdings Plc (EGH) for the exchange of certain banking assets of the company in four countries for ordinary shares in EGH.
“As part of the proposed transaction, EGH would acquire for shares in EGH Atlas Mara’s 62 percent shareholding in Banque Populaire du Rwanda (BPR) and, via the Company’s subsidiary ABC Holdings Limited, all of Atlas Mara’s indirect interests in African Banking Corporation Zambia (BancABC Zambia), African Banking Corporation Tanzania (BancABC Tanzania), and African Banking Corporation Mozambique (BancABC Mozambique). The parties would anticipate mergers of their respective banks within each of Rwanda and Tanzania.
“The company expects to receive as consideration approximately 252,482,300 ordinary shares of EGH representing approximately 6,27 percent of the pro forma share capital of EGH post-closing.
“This implies the consideration to be paid is the equivalent of approximately US$105,4 million,” reads part of the proposed transaction.
According to Atlas Mara, these “four countries contribute less than 2 percent of total group net income, with an implied aggregate return on equity of approximately 2 percent, and represent substantial carrying costs in terms of capital and liquidity support.”