BARCLAYS Plc has sold its majority stake in its Zimbabwean operation to Malawi’s First Merchant Bank (FMB), putting an end to months of a fierce bidding war to take over one of the country’s iconic financial institutions.
By Bernard Mpofu
Informed sources involved in the transaction yesterday revealed that Barclays Plc and FMB directors sealed the deal in London yesterday after months of negotiations.
Barclays Plc and FMB directors and managers then flew to Harare via Johannesburg, South Africa, for meetings with Barclays Bank Zimbabwe managers and employees, as well as Reserve Bank of Zimbabwe officials.
“It’s a done deal,” an informed source said.
“It was signed in London yesterday (Tuesday),” a source revealed yesterday.
“Barclays Plc and FMB managers have just arrived in Harare for meetings to finalise the transaction pending regulatory approvals.”
Barclays Bank Zimbabwe will this afternoon issue a cautionary statement to the Zimbabwe Stock Exchange (ZSE).
The deal was expected to be officially announced to Barclays Bank Zimbabwe managers and workers at around 5pm yesterday in a “town hall arrangement” at the bank’s headquarters in Harare.
However, reports indicated that the Barclays takeover by Malawi’s FMB faces resistance amid accusations that formalities have not been followed through.
Finance ministry officials and those from the National Indigenisation and Economic Empowerment Board yesterday said while Barclays and FMB have agreed in principle, they were yet to fulfil local requirements.
After news of the takeover leaked yesterday, workers said they were worried that Barclays Plc and FMB have gone ahead to announce the conclusion of the deal before the courts have ruled on their application against the takeover.
Both workers and managers have approached the High court demanding to be given the right of first refusal.
The government has in the past blocked Barclays from selling its custodial business to another foreign based financial institution after it announced the deal before clearing withy regulatory authorities.
The government was annoyed by the conduct and refused to approve the transaction. There are also issues to do with due diligence, which the central bank appear to have ignored, which it is feared could affect the integrity of the bank.
There are reports that some FMB directors were embroiled in allegations of financial irregularities in Uganda and Malawi resulting in the collapse of Crane Bank in Kampala, rendering over 300 workers jobless.
Meanwhile, the Zimbabwe Banks and Allied Workers Union (Zibawu) said it was carrying out background checks on the entity utilising its sister unions in the region.
“We have also been in constant discussion with the regulatory authority, RBZ about the transaction,” Zibawu secretary-general, Peter Mutasa said.
“We are also discussing with Barclays Bank Plc, through our structure, the workers committee focusing on securing workers’ rights and interests. Our focus is on the preservation of jobs, security of pensions, Empowerment employee share ownership scheme and the payment of reasonable gratuities.”
The Zimbabwe Stock Exchange listed Barclays Zimbabwe has been operating in the country since 1912 and currently employs over 1 000 employees
Barclays Bank Zimbabwe was established in 1912, and has operated in the country since then, making it a landmark feature on the local financial services landscape.
The bank, listed on the ZSE, has more than 1 000 employees and a countrywide network of 38 branches in the main urban areas.
Barclays Bank Plc, which held 67,68% shareholding in the local unit, last year announced it was disposing of its African assets, including in Zimbabwe, to focus on British and American markets.
Barclays Bank Zimbabwe, alongside the Egyptian business, was not part of the 2013 deal that saw Barclays Africa, formerly Absa, acquire eight African operations from its parent company due to high local political risk.
In February last year, Barclays Plc announced it would conclude negotiations on the pull-out by June this year.
This triggered a stampede for Barclays Bank Zimbabwe.
A number of bidders had been scrambling to acquire the bank since that time.