Bob Diamond’s is aiming to more than double his war chest for African bank acquisitions, with a second fundraising in less than six months as he prepares for more purchases in the sector, reports FT.
Diamond, the former chief executive of Barclays, is set to announce a capital raising through his Atlas Mara cash shell imminently, according to people familiar with the situation. The vehicle secured $325 million in December through an initial public offering on the London Stock Exchange.
Investors said that Atlas Mara’s initial acquisitions, following its successful first round of capital raising, had helped to establish a track record in the industry. “They have developed credibility,” said one with knowledge of the capital raising plans.
Earlier this year, Atlas Mara announced its first deal, paying $265 million in cash and shares to buy BancABC – a medium-sized lender with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe – and a small stake in Union Bank of Nigeria.
The vehicle also signed a deal to buy a majority stake in the Development Bank of Rwanda through its privatisation.
Diamond has also made clear that the acquisition spree was not over, saying in March: “This is the beginning . . . Watch this space.”
Atlas Mara on Tuesday said it was targeting a capital raising of $400 million to finance “future acquisition and bolt-on opportunities”.
However, some investors suggested Diamond may still struggle with further capital raising as he, and other former executives at Barclays, are about to be questioned under caution by the UK’s Serious Fraud Office, as part of a probe into bank’s dealings in Qatar in 2008.
Sub-Saharan Africa is attracting bankers because most of the region’s population of 1 billion do not use banking services. Only a quarter hold a bank account, and fewer than 5 percent have a credit card. At the same time, though, the region is enjoying its best expansion in a generation, with growth averaging 5-7 percent.
