PHILLIMON MHLANGA
First Capital Bank (FCB) is courting new suitors for its 50% stake in the Makasa Sun property at Victoria Falls for US$14.8m, Business Times can report.
The development comes after the bank, formerly known as Barclays Bank, cancelled its deal with Dawn Properties, with which it had entered into an agreement of sale in 2015 to take up its 50% stake in Makasa Sun, which is trading under African Sun’s Kingdom Hotel.
The deal with Dawn Properties collapsed after it failed to meet key conditions and promises. Under the agreement of sale, there were a number of conditions to be fulfilled.
FCB, which has since classified the joint venture asset as a non-current asset held for sale, expressed uneasiness over the Dawn Properties’ deal. It is understood that one of the conditions under the agreement was that about US$7.5m was to be paid within 30 days of concluding the deal.
The balance was to be paid by installments, incurring interest charges which were to be reviewed annually in reference to an agreed interest rate benchmark over a period of up to 15 years.
In a statement accompanying the bank’s financial results, FCB board chairman Sydney Mutsambiwa said they were considering various alternative options to dispose of the 50% shareholdings in Makasa Sun.
“Taking into consideration the various alternatives and the timing of regulatory approvals granted, management’s assessment is that the joint venture continues to be classified as non-current asset held for sale,” Mutsambiwa said.
In its financial results for FY18, FCB achieved a 14.3% increase in total income to ZWL$81.7m from ZWL$71.5m registered in the previous year, due to its aggressive purchase of Treasury Bills. The bank’s Treasury Bills stock was ZWL$282.7m during the period under review, from ZWL$41.02m in the previous year.
The Treasury Bills were classified as investments securities held to collect contractual cash-flows and sell if the need arises.
Net interest income grew 86% during the period under review to ZWL$40m, from ZWL$22m, driven by growth in interest earning assets.
Operating expenses went up 17% to ZWL$54.1m during the period under review, from ZWL$46.4m reported in 2017.
The bank posted a ZWL$24.3m profit, from ZWL$19.8m achieved in the previous year, translating to a 23% increase during the period under review.
Total assets grew 26% during the period under review to ZWL$698.7m, from ZWL$555.6m recorded in the previous year.
The bank’s cash flow from operating activities went down 35% to ZWL$16m, from ZWL$23m in 2017. The bank grew its client base to 180,000 bank accounts during the period under review, from 150,000 customers.
