ADC African Development Corporation GmbH & Co. KGaA: ADC exits shareholding in Ecobank Zimbabwe
Realized profit of EUR 2.75 million / Participation of ADC in Brainworks Capital
The deal is executed via a share swap. ADC swaps its shares in Ecobank for a 28% shareholding in Brainworks Capital Management (Private) Limited, a Zimbabwean holding focusing on banking, insurance and the mining & fuel sectors ('Brainworks'). Brainworks already holds shares in Ecobank Zimbabwe. After acquiring shares from ADC, Brainworks will increase its total shareholding in Ecobank Zimbabwe to 36%.
The transaction is not only ADC's second successful exit - after the profitable cash-exit of Banque Rwandaise de Developpement in 2009 - but also strengthens ADC's partnership with Brainworks and consolidates ADC's presence in Zimbabwe, one of the most upcoming and promising countries in sub-Saharan Africa.
ADC entered the highly interesting Zimbabwean market in December 2009 as one of the first international investors returning to the country by purchasing a 45% shareholding in Premier Bank Zimbabwe for around EUR 3.0 million. As part of its restructuring effort, ADC, together with its local partner Brainworks, managed to subsequently bring in Ecobank Transnational Incorporated, one of the most successful pan-African banking groups, into Premier Bank Zimbabwe as majority shareholder. By acquiring a 70% stake in September 2009, Ecobank brought in additional capital and commitment for additional funding. After Ecobank Transnational Incorporate's entry and subsequent capital increases, ADC shareholding was diluted from 45% to 11.5%.
Dirk Harbecke, ADC's Chief Executive Officer, comments on the transaction: 'Brainworks as a local shareholder is backed by the largest Zimbabwean pension funds, which makes Ecobank Zimbabwe compliant to indigenization laws. Furthermore, Brainworks grants ADC the possibility to broadly benefit in the future from the fast growing market in Zimbabwe by simultaneously diversifying risks as Brainworks, besides banking, is also active in the insurance industry, agriculture and mining. We are very excited about the potential of the country and the potential of our intensified partnership with Brainworks. We are sure that Brainworks access to highly attractive deals will significantly contribute to ADC's success in the future. The first joint transactions are already in preparation.'
ADC African Development Corporation GmbH & Co. KGaA
Belonging to the Angermayer, Brumm & Lange Group, ADC African Development Corporation, ISIN DE000A1E8NW9 (ticker symbol: AZC.GR), was established in September 2007 and quickly positioned itself as one of the leading investors for banks and insurance companies in the above-average growth markets of sub-Saharan Africa. The company's success is primarily due to its local management team, which follows international best practice principles to further develop banks and implements conventional international processes to in-crease their profitability. As the second international emerging market investor in the world, ADC was integrated into the insurance solution offered by the Multilateral Investment Guarantee Agency ('MIGA'), a member of the World Bank Group, primarily due to its strong operational approach and adherence to the highest ethical standards. This insurance offers protection against a variety of political risks, in particular the risk of radical political change.