South African based commodity investment vehicle Xylem Pty has redeemed an ailing Madison Financial Services (MFS) Group with a fresh $35million capital injection. The Lusaka Securities Exchange (LuSE) listed Madison Financial Services (ISIN:ZM00000000391) has in the recent past faced a series of liquidity, credit, solvency and governance related lapses that did trigger regulatory take-over by the Securities and Exchange Commission (SEC) in 2019. With irate creditor classes up in arms for claims relating to investment obligations that matured, for which the asset management arm of the group could not settle, it became vivid that liquidity bottlenecks were an eminent challenge the group faced.
Xylems capitalization of the MFS Group comes timely within the 12months space previous shareholders has committed to addressing the financial quagmires that the 28 year old indegenous entity faced. The Madison brand remains a very strong brand in the Southern African nation synonymous with insurance and other asset management products.
Read also: XYLEM Pty to acquire majority stake in limping Madison Financial Services
Speaking in a sideline interview, Xylem Chief Executive Officer Kajiya Kantumoya expressed not only confidence in Madison as a local bred company but the Zambian economy as a whole that despite the economic downturn, would soon rebound to allow Madison thrive.
“Our investment in Madison Financial Services signifies our confidence in the Zambian business landscape as well as the Zambian economy which we believe will get better going forward. As an investment target for us we believe Madison was a better target having a pedigree of over 28years and being Zambian owned entity. The length of existence is beyond any private owned entity in Zambia while LSA has done a tremendous job that has taken the group this far listing on the Lusaka Stock Exchange (LuSE),” Xylem CEO Kajiya Kantumoya said.
“With Xylems $35million investment, we are positioned to recapitalize all the business units in the group, strengthen its corporate governance principles, introduce new and exciting products on the insurance side and in the asset management space through Madison Finance that the Zambian Public will appreciate and benefit the injection of new competitive blood that will take Madison to its number one spot in the country,” he said.
“It is exciting to see such a strong indigenous brand such as Madison that has been around for a long time being given a fresh lease of life. We look forward to seeing the future successes that this transaction will yield in the Zambian market, Seasoned Investment Banker advising on the transaction Bwale Chime said in a telephone interview.
Xylem Pty acknowledges the strong brand Madison has built in Zambia and will through the capital injection seek to offer exciting products that will catch the market by surprise.
The commodity trading entities capital injection will now make it the Madison Financial Services Group’s majority shareholder with stake of 72.05% taking over from Lawrence Sikutwa and Associates (LSA) and ZFI Holdings combined. As at midday on January 07, MAFS stock was trading for K2.88 a share on the Zambian bourse.
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