Absa pursues Zanaco stake despite move by Barclays
Absa pursues Zanaco stake despite move by Barclays
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Absa is continuing negotiations to buy a 49% stake in Zambia National Commercial Bank (Zanaco) from the Zambian government, despite a proposed offer by UK bank Barclays to take control of Absa.
Absa executive director Louis von Zeuner said there was no change to Absa`s expansion strategy into Africa at the moment.
`Such a lot still needs to take place with Barclays,` he said. `It`s business as usual. We haven`t even addressed this with Barclays.`
Von Zeuner said at present Barclays and Absa only overlapped in two African countries: Zimbabwe and Tanzania. A successful conclusion to Absa`s negotiations with the Zambian government would make it three.
Dana Botha, head of Africa at Absa, confirmed negotiations were continuing. `We are in the process of negotiating some finer clauses with their (Zanaco`s) legal representatives and financial advisers,` Botha said.
Yesterday`s Financial Times quoted Barclays` CE John Varley saying his group would become the largest bank in Africa if its bid for Absa was successful.
But another hurdle may lie in the way of Absa`s attempts to buy a 49% stake in Zanaco.
Opposition parties and unions have voiced concern over the deal, particularly following news that Barclays is planning to bid for a controlling stake in Absa.
According to Zambia`s The Post newspaper, former vice-president Lt-Gen Christon Tembo and leader of the Zambia Alliance for Progress party Dean Mung`omba are opposed to the privatisation of Zanaco, saying the bank should remain in Zambian hands.
Tembo was quoted as saying that Zanaco, which has 25% of Zambia`s banking market, was one of the remaining indigenous institutions that were serving the interests of all Zambians.
`We have always spoken against the sale of Zanaco and it`s a surprise that the company that wants to buy it is also being swallowed up by Barclays.`
Referring to opposition to Barclays` proposed take-over of Absa from the Congress of South African Trade Unions, Tembo said: `It`s interesting that South Africans are themselves opposed to the sale of Absa for the same reasons here.`
According to The Post, Joyce Nonde, general secretary of the Zambia Union of Financial Institutions and Allied Workers, also slated the Zanaco sale in light of Barclays` proposed offer for Absa.
`If Absa is swallowed by Barclays, which has closed most of its rural branches (in Zambia), then we are back to square one,` Nonde told The Post.
Zambia has committed to privatising Zanaco in order to meet International Monetary Fund and World Bank criteria to sell state assets to settle debt and qualify for new aid. The deal was expected to be concluded by June.
Absa was selected as preferred bidder for the stake in Zanaco in January, but talks almost came to an abrupt end in June, when Zambian President Levy Mwanawasa accused Absa of blackmailing his government.
That was after Absa said it would not proceed with Zanaco talks until a solution was found to an oil deal, funded by Absa Corporate and Merchant Bank made, which went wrong and left Absa significantly out of pocket.
Despite that, talks between the Zambian government and Absa resumed in August.
Business Day
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