To assist Fidelity Bank Nigeria Plc in its acquisition and recapitalisation of Union Bank UK, the African Export-Import Bank (Afreximbank) has announced the payment of a $40 million intra-African investment Facility.
The facility was made available in two tranches of US$20 million each. The first tranche allowed Fidelity to partially refinance the purchase of a 100% equity stake in Union Bank UK, while the second tranche was used to support the recapitalisation of the acquired bank by adding more equity, as permitted by the UK regulator.
Through this acquisition, Fidelity Bank is able to establish a new financial institution that extends outside Africa, meeting the banking needs of Africans living abroad, as well as offering offshore banking and correspondent banking services to African institutions.
The executive vice president of Afreximbank’s intra-African Trade Bank and Export Development Bank, Kanayo Awani, said it was part of Afreximbank’s efforts to support African control and ownership of capital while enhancing intra-African trade and investments.
Awani, in a statement, said African firms have the ability to purchase financial assets that foreign entities in Africa and the diaspora have relinquished with the help of Afreximbank’s Bank Acquisition Strategy.
The Afreximbank executive added that the move was also consistent with the Bank’s Diaspora Strategy, which aims to encourage and fund the integration of the African Diaspora with the continent at large.
She said Fidelity was providing services to Africans and African-owned businesses in the UK through the facility, including items to assist investments made by the diaspora. Also speaking, Dr Nneka Onyeali-Ikpe, the MD/CEO of Fidelity Bank, said: “We are very thankful to Afreximbank for supporting our expansionary initiatives for international growth. It is, indeed, the result of a strong partnership between the two institutions over the years that has produced this good outcome.” The acquisition is anticipated to support the integration of the African Diaspora into regional and continental supply chains as well as increase trade flows between Nigeria and the UK.
It is also expected to help small and medium-sized businesses throughout the continent enhance their export competitiveness and light export manufacturing capabilities.