Co-founder of Atlas Mara, Bob Diamond welcomed the strong backing from investors to sell over a third of the African banking investment vehicle to Canada's Fairfax Financial. The deal, which will partly fund Atlas Mara's investment in a Nigerian bank, leaves existing investors in the London-listed vehicle facing painful dilution, including Janus Capital, Wellington Management, Guggenheim and Diamond himself.
“This means we have secured a $200 million capital injection to invest in sub-Saharan Africa. I feel terrific. This is a very strong partner, which has resounding support from shareholders,” he said. His comments came only after over 90 per cent of investors voted in favour of the sale. Atlas Mara will use some of the money to increase its holding in Union Bank of Nigeria, and plans to buy an indirect 13.4 per cent shareholding in UBN, taking its combined direct and indirect holdings in the Lagos-based bank to 44.5 per cent. “Investors are pretty excited. We are now able to get to the next stage of our Nigerian investment at a very low price.”
Diamond said it was a “great time” to buy a mid-sized Nigerian bank even though the country had been hit by its worst economic slowdown since 1991 after the collapse in oil prices in mid-2014 sparked a fiscal crisis. “We are going to get in to one of Nigeria's best banks with the total stake having cost less than 50 per cent of book value.” He added that there were “green shoots” in Nigeria, citing a recent uptick in oil production and an oversubscribed sovereign bond issue. “I think we will look back in a few years and say, 'Can you believe we were able to get a majority stake in a major Nigerian bank for anything less than book value, never mind a significant discount',” Diamond said.
Atlas Mara, which has suffered an 80 per cent fall in its share price since its 2013 listing, plans to raise $100m through an offering of new shares, and a further $100m through the issuance of a mandatory convertible bond to Fairfax.
Fairfax, which is run by Canadian investor Prem Watsa, will also have the right to secure a minimum of 30 per cent of the share offering, and will subscribe for any stock not taken up by existing shareholders.
