The planned acquisition of 62 per cent stake in Banque Populaire du Rwanda Limited (BPR) by Equity Bank Group has stalled.
According to a letter by Equity Group’s Chairperson James Mwangi, the binding term sheet that has been signed for the proposed acquisition of Atlas Mara Group’s assets in Rwanda, Tanzania, Mozambique and Zambia has expired with the parties not having signed detailed transaction agreements.
The acquisition was announced on April 29, 2019 when the two parties signed a binding term sheet to allow for due diligence, entering necessary agreements and seeking approval from regulatory authorities.
However, the process has since been suspended on the expiry of the binding term sheets with no detailed agreement reached so far.
Mwangi, however, noted that they expect discussions to continue early this year to reach a mutually acceptable agreement.
There is no certainty that a deal will be reached, he disclosed in a letter.
Among the details of the initially proposed acquisition was that Equity Bank would spread its presence across the region by acquiring 100 per cent stake in three other banks owned by Atlas Mara through African Banking Corporation (ABC) in Zambia, Tanzania and Mozambique.
Atlas Mara would, in turn, have an allotment of shares at Equity Bank Group.
In 2020, there is likely to be one or more financial institutions acquisition following a requirement that local banks raise their minimum capital from the current Rwf5 billion to Rwf20 billion, according to a new licensing regulation for the sector.
This presents commercial banks a task to raise the capital fourfold which some had admitted is an uphill task and would lead to mergers and acquisitions.