GetBucks recapitalisation gains traction

GETBUCKS Microfinance Bank (GetBucks) last week said its directors have approved a recapitalisation, which the micro-lender is currently negotiating with an unnamed party.

This comes as the Zimbabwe Stock Exchange-listed company had urged caution in the trading of its shares last month, saying the impending capital raise, “if successfully concluded, may have a material effect on the price of the company’s securities”.

In a statement last week, the bank said advisors, an underwriter and other related partners for the deal have also been identified and are in the process of being appointed, adding that shareholders would receive an invitation to an annual general meeting pertaining to the transaction in the first quarter of 2022.

This all comes as the institution recently said it was failing to meet the Reserve Bank of Zimbabwe’s minimum capital threshold. Microfinance institutions were supposed to have attained a minimum capital level of US$5 million or equivalent by the end of 2021, but GetBucks’ inflation-adjusted regulatory capital had only reached US$2 million by September 30, 2021, according to its latest trading update.

“Shareholders will pursue equity transactions to bridge the gap between the minimum capital requirement and the current regulatory requirement. However, given the limited amount of time to December 2021, it is unlikely that the regulatory capital will be met, and the regulator has been approached with a request to extend the deadline,” Getbucks said in the update, which was issued in November last year.

It also comes as the bank’s credit lines have lately tapered on account of tight liquidity in Zimbabwe.
In a trading update given in May last year, Getbucks said the tight control on reserve money by the central bank made it harder to access wholesale lines of credit during the three months ended March 31, 2021.

The monetary authorities, who have concluded that money supply is “directly proportional to inflation”, have been trying to keep reserve money growth ― the fundamental component of money stock ― under control to arrest inflation, which closed 2021 at 60,74 percent.

Meanwhile, Getbucks has appointed Thembelihle Munowenyu as an independent non-executive director with effect from February 8, 2022.
Thembelihle is a seasoned business professional with over 19 years’ experience in finance, corporate affairs and manufacturing. She is currently the chief executive of Phoenix Consolidated Industries, a diverse manufacturing group in the engineering, plastics and steel industries.
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