KINGDOM Financial Holdings Ltd (KFHL)’s operations in Botswana could get a boost from a 50-50 joint venture the company is negotiating with an unnamed investor in that country. <
It is understood one of the partners in the unnamed firm is former president Sir Ketumile Masire. The Gaborone operation trades under the name Kingdom Bank Africa Ltd (KBAL).
The KBAL operation was placed under the management of a curator by the Bank of Botswana after it was found that its capital adequacy ratio had fallen below minimum statutory guidelines.
The Botswana subsidiary was formed as part of the group’s regional expansion plan and as a hedge to cushion the company against the unstable economic situation in this country.
On Wednesday last week, the KFHL was allowed by the Reserve Bank of Zimbabwe to dilute its share ownership in the Botswana operation.
Negotiations between Kingdom senior management and the Botswana investment arm are understood to have reached an advanced stage.
Banking sources said already a meeting had been held between the two parties with another set for this month or in August.
Kingdom chief operating officer Frank Kufa could not be reached for comment as he was said to be either attending a series of meetings or out of his office.
Kingdom founder Nigel Chanakira could not be reached for comment from his South African base.
Farai Mafunga, the company’s secretary, last month issued a cautionary to shareholders advising about the closure of operations in Gaborone.
“The Bank of Botswana, which is KBAL’s regulatory authority, determined that KBAL’s capital adequacy position had fallen below the minimum prudential guidelines,” Mafunga said.
He said at the time of its registration in May 2003, there was a realisation that KBAL needed to be recapitalised through the injection of a further US$3 million to make it viable.
“It was envisaged that the entity would be capitalised from Zimbabwe. This proved impossible when the foreign currency situation in Zimbabwe became critical and as a result the financial performance of KBAL was compromised,” he said.
“Consequently, efforts to re-capitalise KBAL are being pursued through the offer of shares to local investors in Botswana and other foreign investors who have all since been committed to this venture pending approval from the regulatory authorities in Zimbabwe.”
Kingdom is also pursuing other operations in Zambia.