Dr. James Mwangi, Managing Director and CEO of Equity Group Holdings Plc. COURTESY: TWITTER/Equity Bank Kenya A proposed deal between Kenya’s Equity Group Holdings and financial services company Atlas Mara in which the former would acquire banking businesses in four African countries from the latter collapsed the Kenyan lender said on Tuesday.
The banking businesses, located in Mozambique, Rwanda, Tanzania and Zambia, would have been acquired in exchange for shares in Equity Group Holdings, Kenya’s largest bank on the Nairobi Securities Exchange by market capitalization.
In a statement issued on Tuesday, Equity Group Holdings said both parties mutually agreed to discontinue discussions on the transaction for the “foreseeable future”. Equity Bank said its board of directors took the decision due to the uncertainty of risk.
Equity Group Holdings CEO Dr. James Mwangi said that the board considered events that have taken place since January when the two parties agreed to extend transaction discussions, especially the impact of the COVID-19 pandemic and the economies in which the Bank operates.
“The Board’s Business Continuity Management is focused on conserving cash and liquidity and deploying it to support our customers to survive during this economic crisis and to recover and thrive post the crisis. A strong capital and liquidity position gives us the strength and capacity to cushion our business, accommodate and walk with our customers during these challenging times,” Mwangi said.
“We have deployed a defensive and offensive mechanism through loan accommodations and rescheduling/restructuring of up to 25% of the total loan book for periods of up to 36 months. This will enable our customers to go through the prevailing turbulence, while at the same time preserving cash to shore up the financial revival and growth of their businesses post the COVID-19 crisis.”
Mwangi added that the lender remained committed to expanding its presence across Africa despite the latest development.
“The Group is committed to its strategic objective of expanding its footprint in Africa to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders.”
In January, both parties failed to sign a binding agreement on the transaction, which was announced in April 2019, without providing any explanations.
Atlas Mara said in a statement then that there was no assurance that the potential transaction will be concluded on the terms previously announced, which would have seen it receive 6.3 percent of Equity’s shares. The completion of the deal would […]
