NMB founding shareholders will have their shareholding diluted to 12,48% of the group’s total issued share capital from 17,09% after the proposed US$14,8 million capital raising initiative.
NMB is seeking to raise US$14,8 million through equity from international firms — AfricInvest Capital Partners, FMO and Norfund.
The shareholding for the three will be 26,97%.
The subscription price per share will be US$0,143 post the consolidation of the shares while as previously reported, the equity investment has a buyback option.
CE James Mushore told analysts on Wednesday the transaction looked like equity, smelt like equity but tasted like debt.
“Overall it’s a clever transaction because we needed tier I capital to meet the RBZ capital requirements,” he said.
Norfund will provide an additional subordinated 7-year term loan of US$1,4 million, which was approved by RBZ as Tier II capital.
Mushore said the buyback is exercisable from 5th to 9th anniversary provided there are excess reserves over and above the minimum regulatory capital requirements.
He added capital would come from retained earnings in the period to December 31 2015 and RBZ had approved NMB’s 2015 compliance plans.
Mushore said repayment would be done in whatever currency in use at that time while the subordinated loan will be repaid in US dollars.
The group expects the transaction to open doors for the bank in Europe as “we will be able to unlock more because of the deep pockets of the investors.”
The bank will be able to avail US$350 million lines of credit.