HomeBusiness DigestCFX mulls rights offer to meet RBZ requirement

CFX mulls rights offer to meet RBZ requirement

Paul Nyakazeya

CFX Financial Services is planning to launch a massive $2 trillion rights offer to increase its capital base ahead of a September 30 deadline by which fin

ancial institutions should meet new capital levels, businessdigest established this week.

Commercial banks are expected to raise their capital from $100 billion to new US dollar-linked levels of US$10 million or $1 trillion at the ruling exchange rate.

CFX operates a commercial bank, CFX Bank, and merchant bank but merchant banking operations have been merged into the commercial bank following approvals by regulatory authorities.

Sources said although no date had been set yet for the rights issue, plans for the issue had reached an advanced stage and a notice could soon be sent to shareholders advising them of the plans.

Imara Edwards Securities have already been roped in as financial advisors to the rights issue, the sources indicated.

CFX managing director Wilson Gwatiringa could neither confirm nor deny that the group was going to launch a rights issue to raise money for new capital but indicated that frantic efforts were being made to ensure the institution meets the new requirements.

“As a public company we are prohibited from commenting in detail on your questions,” said Gwatiringa in a statement responding to businessdigest’s questions.

“We can state however that we are working towards a solution that will see us (CFX FS) very well-placed with regards to the capital base and we are confident that we will meet the minimum capital requirements within the allocated time,” Gwatiringa said.

Businessdigest reported two weeks ago that CFX was in talks with German bank Deutche Bank for a possible cash injection in return for equity.

The paper also reported that local institutional investor, Zimre Holdings, was also in talks with CFX for a deal that would see it taking up equity in the institution.

Deutsche Bank, one of Germany’s largest banks, has 1 588 branches globally valued at 1 035 billion euros by way of assets. The German bank’s officials were reported to be in Zimbabwe five weeks ago for a brief surveillance on CFX.

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