ACTIS $130m investment: Diamond Bank awaits approval
Category: Public Offers Private Placements
March 08, 2007/Guardian
To actualise an equity investment of $130 million in Diamond Bank by an international consortium led by Actis Capital LLP, the bank\'s board of directors has applied to the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), for an approval of the deal.
Already, the equity investment has been endorsed by both the Actis Consortium and the board of directors of Diamond Bank Plc, but the bankers shareholders would be required to also approve the investment.
The bank\'s shareholders have already indicated their willingness to approve the investment, noting that wherever Actis goes into, they always want to ensure the organisation becomes stronger.
For instance, the President of Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu, said: \"I feel okay with Actis Investment in Diamond Bank. There is evidence that wherever they go into, they always ensure that such organisation grows. Though they don\'t stay too long, I expect the bank to record tremendous growth in the next five years.
\"The bank has given explanatory statements on the new investment and it is satisfactory. We will approve the proposal because it is good for the bank and investors.\"
Actis is a private equity investor with special focus on emerging markets. Actis has operated for over 50 years in Africa and other emerging market via its origins with Commonwealth Development Corporation (CDC), owned by the British government. Actis today is a private equity investor in emerging market with funds under management of US$3.4 billion, for investors including the British and Canadian governments as well as 32 other international institutional investors. Actis has significant investments across Africa, China, South Asia, and South East Asia. In Nigeria, Actis currently has diverse investments including in Starcomms, UAC of Nigeria Plc and The Palms Mall in Lagos.
Underpinning this investment is the success of the reform programme of the Federal Government, which made possible the BB country rating that Nigeria received from two international rating agencies. Fitch Ratings and Standard & Poor\'s last year. The ratings opened the door for increased foreign investment in the country. The pioneering international partnership is a direct result of the consolidation and reform in the Nigerian banking sector driven by the Central Bank of Nigeria and the exciting prospects for Diamond Bank within the evolving sector. The strength of Diamond Bank post-consolidation and the business prospects arising from the economic reforms of the government must have been some of the major attractions for Actis investment.
Actis has considerable banking industry investment experience both in Africa and Asia. Actis is the leading institutional investor in two African banks, DCFU (Uganda) and BCR (Rwanda). In India, Actis was the leading institutional investor in UTI, which has since been acquired by HSBC. Actis is currently leading a USS1.1 billion investment in Alexander Forbes of South Africa (risk management and insurance brokerage), the largest ever financial services buoyant investment in Africa.
These banking industry investments are supported by a specialist financial services team within Actis with leading edge industry experience and a broad sector understanding ranging from retail banking (mortgage business and consumer lending) to asset management. Consequently, the bank will benefit immensely from Actis deep specialist bank consulting experience and network, strong connections to international banks with considerable insight into cutting edge banking strategy; and detailed understanding of successful tends in emerging markets financial business models.
The partnership will also facilitate the bank accessing long-term debt funding and Tier 2 capital, by leveraging on Actis international alliances and joint ventures. In addition, Actis will assist the bank in maintaining very high standards of corporate governance in line with the CBN code of corporate governance and international best practice.