Kingdom To List On JSE, SEM, ZSE

This detail emerged after the Extraordinary General Meeting (EGM) held in Harare.

“We will be listing on the JSE and the Stock Exchange of Mauritius (SEM),” said Susan Bango, KFHL Chairperson.
“We will also seek a re-listing on the ZSE during this period. I thank all of you for supporting the motions today.”

Kingdom has asked shareholders to help raise US$25 million before then, however. “we need US$15 as equity,” Bango said. “We also need US$10 to retire the debt at our subsidiary, Kingdom Bank Limited (KBL).”

She revealed that Kingdom had owed the wealthy Meikles Africa Limited (MAL) US$22,5 million during the time of the failed “marriage made in heaven”.

To-date KFHL has US$21,8 in its kitty while Kingdom Bank Limited, the flagship, has about US$13,8 million.

The Governor of the Reserve Bank of Zimbabwe (RBZ), Dr Gideon Gono, gave KFHL a reprieve after its subsidiary commercial bank had failed to raise sufficient seed capital to qualify for the RBZ’s minimum capital requirement levels by the given date.

KFHL was initially listed in June, 1999, on the ZSE through a reverse takeover of Kingdom Securities Holdings (Private) Limited and the Discount Company of Zimbabwe Holdings Limited, then listed on the ZSE.

In 2007, KFHL merged with MAL, Tanganda Tea Company Limited, and Cotton Printers (Private) Limited (now liquidated) to create Kingdom Meikles Africa Limited (KMAL), resulting in the delisting of the company and listing of Kingdom Meikles Africa Limited (KMAL) on the ZSE.

KMAL was the ZSE’s most heavily capitalised firm at the time and was led by tycoon and international banker, Nigel Chanakira, who had founded Kingdom.

In 2010, however, the shareholders of KMAL approved the demerger of KFHL from KMAL.

Bango sid having considered a number of factors, the Directors were of the view that “re-listing KFHL is in the interest of shareholders and the Company”.

She said given the dynamics relating to the Company’s strategic thrust, future financing requirements, there was need for a “price discovery mechanism” and liquidity of the issued shares” and the Directors were of the view that it “is beneficial for the company to obtain a listing on the JSE and ZSE in order to access deeper equity and bond markets”.

“Apart from listing on the JSE and ZSE, the Company is presently undertaking due diligence on a private equity listing firm listed on the Mauritius Stock Exchange (MSE) with a view to listing through a reverse take-over,” Bango said.

“The shares to be issued pursuant to the proposed transaction will be distributed to Kingdom shareholders. The acquisition by Kingdom of the target firm and distribution of shares issued pursuant to the proposed transaction is subject to regulatory approval. Directors are of the view that implementing the reverse takeover of a firm domiciled and listed on MSE will be advantageous in many respects in the long-term.”

She told shareholders that, however, implementation of the reverse take over did not remove the need to list on the ZSE and JSE.

“Consequently, the Directors are pursuing the listing of the company on these exchanges in order to enhance shareholder value and access more liquidity necessary to sustain its growth strategy,” Bango said.

More than 200 shareholders, including KFHL founder but now Non Executive Director, Nigel Chanakira, attended the EGM in Harare.

Meanwhile KFHL has opened its Rights Offer in which it intends to raise US$25 million for recapitalisation of its Kingdom Bank Limited (KBL) subsidiary, acquire Kingdom African Bank Limited (KABL), Amara Tech Limited, and re-list on the Zimbabwe Stock Exchange (ZSE).

Bango said the company needed to strengthen its capacity to underwrite business transactions by raising US$25 million, comprising equity and debt capital of US$15 million and US$10 million, respectively.

KFHL owns 35,7 percent of the issued shares of KBAL and KBAL owns 35 percent of the issued shares of Amara Tech (Private) Limited.

KBAL is an offshore investment bank that has an issuer and acquirer MasterCard licence.

Amara Tech, on the other hand, is an approved processor of MasterCard transactions which has an agreement to process transactions undertaken by KBAL cardholders or clients.

In addition to KBAL, KBL has already been accredited to issue its clients MasterCard pre-paid debit cards.
“Kingdom wishes to leverage on the MasterCard brand to promote its local and regional growth strategy,” Bango said.

“Having a controlling stake of the issuer and acquirer as well as the processor offers strategic and competitive advantages for kingdom. These investments offer the Company access to important markets necessary to improving its local market share and regional presence, thereby diversifying various market-linked risks and improving the revenues from particular markets. This initiative is expected to offer enhanced scope for sustainable improvement of shareholder value.”

She said KFHL was currently undertaking a due diligence on the Private Equity Firm listed on the Stock Exchange of Mauritius (SEM) with the view to concluding a “reverse take-over”.

“Should the due diligence be successful and the transaction is implemented, the Company will become listed on the SEM,” Bango said.

“The target Private Equity Firm has assets in South Africa and Mauritius and offers the Company the opportunity to list on a regional exchange and access to international capital required to support its growth strategy”.
KFHL had a US$22,5 million debt which it had borrowed from the wealthy Meikles Africa Limited MAL) Group.
Dr Gideon Gono, Governor of the Reserve Bank of Zimbabwe (RBZ) had to come in and allow KBL more time to raise its cash to have the minimum RBZ funds in its kitty.

The KFHL Rights Offer will close on October 10 and allotment of Rights Offer shares will be done on October 14, Bango confirmed.