Bob Diamond’s Africa venture, Atlas Mara, is planning to raise over $400 million in a second round of fundraising in less than six months, a move that will more than double its capital at a time when its credibility as a serious player in the African banking sector is growing and plans to acquire more banks on the continent shifts into a higher gear.
Financial Times reported that the former Barclays executive had announce a second fundraising initiative through a private placement of new shares to fund its growth in Africa.
Atlas Mara, which was formed by a merger between Atlas Merchant Capital LLC, set up by Diamond in New York, and Africa-focused billionaire entrepreneur Ashish Thakkar’s Mara Group Holdings Limited, said it would place 36,500,000 new ordinary shares at an issue price of $11 per offer share.
Atlas Mara secured $325m in December through an initial public offering on the London Stock Exchange and went ahead to make its first investment in BancABC, a medium-sized lender with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe, and a small stake in Union Bank of Nigeria in a deal worth $265 million in cash and shares.
The vehicle also signed a deal to buy a majority stake in the Development Bank of Rwanda through its privatisation.
Investors told Financial Times that Atlas Mara’s initial acquisitions had helped to establish a track record in the industry. “They have developed credibility,” said one of the investors.
However, some investors suggested Mr Diamond may still struggle with further capital raising as he, and other former executives at Barclays, are about to be questioned under caution by the UK’s Serious Fraud Office, as part of a probe into bank’s dealings in Qatar in 2008.
Bob Diamond, who was the CEO of Barclays bank from 2011, was ousted from his position in 2012 after the bank was fined $450 million for alleged manipulation of the Libor interbank lending rate, Reuters reported.
Sub-Saharan Africa is attracting bankers because most of the region’s population of one billion do not use banking services. Only a quarter hold a bank account, and fewer than 5 percent have a credit card.
The scope for growth in Africa is also significant with economic growth in the region set to outpace the global average over the next three years at an average of 5-7 percent, according to World Bank last year’s figures.
