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Newly formed Arise makes two African banking investments

Feb 14 2017 17:35

Cape Town - Newly formed investment company, Arise has recently acquired a 27.7% stake in CAL Bank in Ghana.

The shareholding in CAL Bank was acquired by Arise from DPI, an Africa-focused private equity firm with assets in excess of $1bn under management. Settlement is to be effected on 14 February 2017.

Arise, a collaborative partnership between international companies, Norfund, FMO and Rabobank take and manage minority stakes in sub-Saharan African Financial Service Providers (FSPs) with the core aim of building strong and stable institutions that serve retail, small and medium enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services.  

“The main objective of establishing this company was to strengthen and develop effective, inclusive financial systems in Africa in order to contribute to economic growth and poverty reduction,” said Arise CEO Deepak Malik.  

“We are excited to partner with CAL Bank, the third largest bank in Ghana based on loans advanced and a listed company on the Ghana Stock Exchange. The institution has a strong track record of delivering high growth and solid performance and with the support of Arise is well-positioned to deliver future growth in Ghana, one of Africa’s core emerging economies.”

According to Frank Adu Jnr, CEO of CAL Bank, this landmark transaction will mark the successful exit of a leading private equity investor, despite a challenging macro environment in Ghana.

Webber Wentzel and Bentsi-Enchill, Letsa & Ankomah acted as legal counsel to Arise on the transaction, while IC Securities acted as Transaction Broker on the transaction. PwC Transaction services and Genesis Analytics acted as due diligence advisors to Arise.

READ: Fund on hiring spree for R8.76bn African finance venture

Bridging loan

An approval in principle of a $50m bridging loan by Arise is set to boost the banking sector in Uganda.

According to Malik the company will also provide a $50m bridging finance facility to dfcu in Uganda.

“The facility was availed on commercially-agreed terms, to enable commencement of the recapitalisation of dfcu Bank in the short term, while complying with regulatory capital thresholds,” he said.

dfcu Bank recently concluded an agreement with the Bank of Uganda to purchase the assets and assume the liabilities of Crane Bank (CBL), which was in receivership. The acquisition of CBL will allow dfcu Bank to diversify it service offerings to its clients and make banking more accessible to the public.

Further, the integration will enhance dfcu Bank’s competitive edge against peers in the retail and SME sector.

Juma Kisaame, managing director dfcu Bank, said the acquisition gives the impetus to achieve its strategic objective of building a robust retail operation with multiple delivery channels while consolidating its position as a key player in the SME market segment. It also supports its goal of promoting financial inclusion in Uganda.

“Arise supports the planned expansion of dfcu Bank. We foresee the integration as a catalyst for creating a strong and efficient Ugandan bank, which will have extensive local representation and scalability of distribution - via branch and digital channels,” said Malik.

“This partnership speaks directly to the mandate of Arise, which is to collaborate with local Financial Service Providers (FSPs) in sub-Saharan Africa to boost economic growth through strengthening the banking sector.”

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africa  |  uganda  |  ghana  |  financial services  |  banking

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