Bob Diamond’s Atlas Mara to sell Rwandan and Tanzanian units

Nairobi — Atlas Mara, the African banking group started by former Barclays CEO Bob Diamond, agreed to sell its Rwandan and Tanzanian operations as the lender started talks with debtholders about upcoming repayments.

Kenya’s biggest bank KCB Group will buy a 62.06% stake in the Rwanda business and Atlas Mara’s Tanzanian unit to further expand its operations in the East African region, the Nairobi-based company said. It agreed to pay 1.09 times book value for Banque Populaire du Rwanda and 0.42 times for African Banking Corp Tanzania, it said in a statement Thursday.

The deal is part of London-listed Atlas Mara’s strategy of paring back on its African foray after Diamond misjudged competition on the continent and paid too much for acquisitions. The onset of the coronavirus pandemic has accelerated the need to reposition the company, which has seen a 97% plunge in its stock since it started trading towards the end of 2013.

“The board is committed to exploring all avenues to ensure our core franchise is positioned to weather this downturn,” Atlas Mara’s chair, Michael Wilkerson, said in a separate statement. It is engaged in talks with principal holders of convertible bonds due December 31 and other creditors “regarding a range of options to address the upcoming debt maturities for the benefit of all stakeholders.”

If the deal with KCB is successful, Atlas Mara will be left with operations in Nigeria, Botswana, Zimbabwe, Zambia and Mozambique.

For KCB, which has a presence in six countries and a representative office in Ethiopia, the deal will make it the second-largest bank in Rwanda once it has combined Atlas Mara’s subsidiary with its own, CEO Joshua Oigara said in its statement. In Tanzania, where KCB is already active, the merged entity will rank among the top 10 banks.

The lender stepped in after talks with its Nairobi-based rival Equity Group in June ended negotiations to take over Atlas Mara’s entities in Rwanda, Tanzania, Zambia and Mozambique.

“The transaction fits within the group’s expansion strategy and will see us increase our market share and distribution network across Rwanda and Tanzania,” KCB’s CEO said. It will also position “the bank for sustainable growth in the long-term”.

Bloomberg