2nd Oct 2014 13:15
LONDON (Alliance News) - Old Mutual PLC Thursday said that Nedbank Group Ltd, the South African banking subsidiary in which it holds a 52% stake, has exercised its rights to subscribe for a 20% stake in Ecobank Transnational Inc.
In a statement, Old Mutual said that Nedbank will subscribe for 4.51 billion new Ecobank shares for USD493.4 million in cash.
Ecobank will use part of the proceeds to repay a loan of USD285.0 million granted to it by Nedbank in 2011, according to Nedbank's website. Nedbank and Ecobank will have representation on one another's boards.
"This investment demonstrates our commitment to Ecobank and is a further deepening of Nedbank's strategic alliance. It is a significant step in the Old Mutual Group's ambition of becoming Africa's financial services champion," Old Mutual Chief Executive Julian Roberts said in a statement.
Ecobank and Nedbank Group established their strategic business alliance in 2008 in order to provide banking services across the continent to each other's clients.
According to Old Mutual, the deal deepens the alliance and includes a commitment to reciprocal technical banking expertise and management support.
Old Mutual currently has bancassurance agreements with Ecobank in Ghana and Nigeria. Ecobank remains a shareholder in Old Mutual Nigeria, which Old Mutual bought from Ecobank in February 2013.
Old Mutual shares were Thursday quoted down 0.5% at 179.50 pence.
By Samuel Agini; [email protected]; @samuelagini
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