Zimbabwe: African Century Ushers NMB Into Offshore Markets

Financial Gazette (Harare)

Munyaradzi Mugowo

24 June 2011

AFRICAN Century, the single largest majority shareholder of NMBZ Holdings, says it is mobilising lines of credit for the banking unit of its dual listed associate, NMB Bank, leveraging on its access to international capital markets.

NMBZ managing director, James Mushore, recently told asset managers the local economy’s appetite for credit was insatiable and constituted a co-mpelling banking case.

African Century, a Lon-don-based private equity fund, acquired a 28 percent interest in NMB Holdings last year through an undersubscribed US$10 million rights issue in which it participated as underwriter.

Jonathan Chenevix-Trench, African Century founding partner, former chairperson and chief executive officer of Morgan Stanley International, in an exclusive interview, disclosed the private equity fund would use its strong market links and intelligence to prop up NMB.

“We’re trying to mobilise external lines of credit for NMB,” Chenevix-Trench said.

“African Century has a great team of executives with great ski-lls and great experiance. I travel once a month from London to Zi-mbabwe. African Century shareholders are excited because Zim-babwe is shaping up well. It’s been a good experience since we came in.”

Mushore, in his presentation to asset managers, disclosed NM B Bank was in talks with lenders in “South Africa, the region and international” for lines of credit, leveraging on inter-party relations with African Century.

“There’s an appetite for credit in the market. We’re actually working very hard to access lines of credit from South Africa, the region and international,” Mush-ore said, adding NMB Bank would reduce its loan to deposit ratio from 73 percent at the moment to the market average of around 50 percent.

Chenevix-Trench said African Century had a long-term view on its Zimbabwean portfolio from which it plans to leap-frog sub-Saharan Africa.

He also disclosed the private equity fund had made Harare the regional headquarters for its sub-Saharan Africa agricultural operations in Mozambique, Zambia and Uganda.

The investment portfolio in sub-Saharan Africa comprises food agriculture, private equity and financial services currently revolving round NMB Bank, a premium-market lender with a primary listing on the Zimbabwe Stock Exchange and a secondary listing on the London Stock Exchange.

The banking operation laun-ched a leasing division last year to buttress the economy’s recapitalisation efforts by structuring deals for the acquisition of plant and equipment.

Estimates put the economy’s medium-term recapitalisation bill at US$23,2 billion: US$7 billion for the mining industry, US$2 billion for the manufacturing industry and US$14,2 billion for the infrastructure sector.

Mushore said NMB hoped to reduce its loan to income ratio to 50 percent by 2013 from about 79 percent last year, 77 percent excluding the costs of retrenchments.

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