Sources close to the development said this week Econet had agreed to pay US$20 million for a 49% stake in TN Bank, a development that values the bank at around US$40 million.
The same sources said Econet’s decision to buy into TN Bank was part of a wider plan to facilitate and broaden its EcoCash product, which the mobile phone operator launched in partnership with the bank.
Analysts said the deal would help create business synergies for the bank and Econet.
Ecocash is a mobile money transfer product. TN Bank was actively involved in the registration of EcoCash clients.
TN Financial Holdings (TNFH) CEO Tawanda Nyambirai would not be drawn to comment, citing confidentiality around the transaction. But a source close to the deal told businessdigest that Standard Bank Group, a leading South African bank, had done the valuation of the bank.
Nyambirai last week told our sister paper –– NewsDay –– that the investment would reposition TN Bank among the top four banks in the country.
This comes after the company announced in a cautionary statement two weeks ago that it was in talks for a possible investment.
Other sources say Econet founder Strive Masiyiwa could be diversifying into the banking sector after his relationship with Kingdom Bank founder Nigel Chanakira soured following the failed KFHL and Meikles merger. Econet held a considerable stake in KFHL and resultantly Kingdom Meikles Africa, which shares the company distributed to Econet shareholders as a dividend in specie last year.
Econet Wireless Ltd had not responded to businessdigest’s enquiries at the time of going to print.
The mobile phone operator is in an acquisitive mood as evidenced by an acquisition earlier this year of ZOL –– a leading Internet Service Provider –– through its technical partner company Liquid Telecomms.
In the six months to June 30 2011, TN Bank’s deposits more than doubled to US$49 million, from US$22 million during the same period in 2010. Early this month Nyambirai told businessdigest his group would go into retail and fast-food business.
TNFH’s market capitalisation was US$36,04 million as at Tuesday.
The group also controls Pelhams, a leading furniture retailer in the country, TN Harlequin Luxaire, which became part of the TNFH. –– Staff Writer.