Monday, August 18, 2014 10:09 pm
South Africa’s Nedbank is to convert a $285 million loan to shares in Ecobank before the end of the year, Ecobank’s chief executive said on Monday.
Albert Essien, CEO of the pan African bank said he was confident Nedbank would exercise the conversion option and also top up the conversion amount with $206 million to give it a 20 percent stake in Ecobank.
After the Nedbank deal Ecobank expects its capital adequacy ratio to hit 18.7 percent of assets by year-end, up from 17.5 percent in the first six months of the year, Essien said.
“The Nedbank stake is capped at 20 percent. If they do convert … I think that will strengthen the business relationship that we have (had) since 2008,” Essien told an analysts conference call on its half-year results.
“The conversion will trigger reciprocal board seats. We see it as very positive and we expect that it will happen.”
Nedbank’s chief executive, Mike Brown said two weeks ago that its had until November to decide if it will take the 20 percent stake in the Togo-based bank, under a strategic alliance it has with Ecobank.
Shares in Lagos-listed Ecobank, which is up 6.3 percent this year, rose 2.79 percent on Monday to 17.20 naira each.
Essien also said he expected another institution EIB to convert about $58 million of debt into shares.
Last month Ecobank, which has a presence in 36 African countries, reported 27 per cent rise in its first-half pre-tax profit to 41.67 billion naira.
.From Reuters report