financial institution to a strategic equity partner as it seeks to recapitalise the bank.

Well-placed sources said last week Government was “most likely” to bring on board new equity partners to inject capital into the bank equal to 49 percent of Agribank’s issued share capital. Government will remain the controlling shareholder with 51 percent stake.

Plans to shed 49 percent shareholding in Agribank to private players are in line with the Government thrust to foster Public-Private Partnerships to recapitalise perennial loss making State-owned entities.
“Agribank is among parastatals that are being restructured and it has been resolved that a new partner be brought in through private placement,” said one source.

Government is prepared to relinquish 49 percent to a strategic partner but will retain 51 percent.
No official comment could be obtained from Agribank by the time of going to press. But in his recent report to Cabinet, State Enterprises and Parastatals Minister Gorden Moyo said a committee on parastatal reform was considering Agribank’s restructuring.

“The State Enterprises Restructuring Agency worked with Agribank management and the Ministry of Agriculture, Mechanisation and Irrigation Develop-ment to prepare a memorandum on the restructuring of Agribank,” said Minister Moyo. He said the proposal now awaits approval by a committee on restructuring of parastatals.

Earlier, the bank – which was instrumental in providing agricultural loans post the Government land reform programme era – said it has already identified a strategic equity partners but could not disclose the identity.
Last year, Government injected US$10 million into the financial institution to enable the bank to underwrite more business and recover from a loss-making position. During full year to December 31, the bank reported a US$8,2 million profit.

In March, the bank secured US$30 million from SA’s Industrial Development Corporation for on-lending. According to reports, the bank is also negotiating for further lines of credit to the tune of US$70 million.

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