State owned pension fund in Africa’s second largest copper producer, Zambia, National Pension Scheme Authority – NAPSA has raised its shareholding in Zambia Industrial Commercial Bank – ZICB to 65.0% from an initial 15.83%. The equity stake then makes NAPSA majority stakeholder in the bank. This transaction was facilitated through a special purpose vehicle NAPSA Investment Holding Company Limited when it participated a rights issue.
Zambia Industrial Commercial Bank is a metamprphosis product of a recapitalisation of the defunct Intermarket Bank that collapsed due to unbridled governance practices by previous shareholders. The Industrial Development Corporation – IDC, NAPSA, Madison Financial Services – MFS and Workers Compensation Fund Control Board – WCFCB are the key shareholders of the indigenous bank who capitalised it to drive the commercialisation and industrialisation of the copper producers economy through supporting the MSME sectors in addition to local corporates.
“We are pleased to be part of the transformation of the Zambia Industrial Commercial bank through this capital injection. This injection is aimed at building capacity for market competitiveness, achieving operational efficiencies and realigning the strategic direction of the bank to facilitate growth in the SME sector in the country which has remained untapped,” NAPSA Director General Yollard Kachinda said.
NAPSA transacted through a rights issue taking up rights that the other shareholders didn’t exercise and this has widened its controlling stake in ZICB. However it remains vague what the new shareholdings will now be given that NAPSA holds 65.0%. The associated nominal value of the transaction has not been disclosed which ideally a pension fund holding pensioners funds in custody, has a duty to disclose how it invests pension proceeds with precision. This transaction is one of the many investments that the pension fund has made in the last one year after the MTN Telco equity stake take-up in a private placement in 2020.
The capital raised through the transaction will be used to strengthen its capital position and improve its cashflows, NAPSA stated in a press release.
The Kwacha Arbitrageur.
