FBC, Agrib­ank seek to raise $20m for agric

Chronicle (Zimbabwe) - - Business Chronicle - Martin Kadzere

FBC Bank and Agrib­ank have en­tered into a part­ner­ship to mo­bilise $20 mil­lion for 2016/17 agri­cul­ture sea­son through the is­suance of Agro Bills, an of­fi­cial said last week.

The two fi­nan­cial in­sti­tu­tions will soon in­vite in­vestors such as pen­sion and prov­i­dent funds, in­sur­ance com­pa­nies, com­mer­cial banks, in­di­vid­u­als in Zim­babwe and other stake­hold­ers to sub­scribe for Agro-Bills, FBC spokesper­son Ms Priscilla Sadomba said last week. The Bills have been ap­proved by the Min­istry of Fi­nance.

They will have a ten­ure of be­tween 270 days and 360 days while in­ter­est is ne­go­tiable on pri­vate place­ment ba­sis, said Ms Sadomba. The Bills have the fol­low­ing fea­tures:

An un­der­tak­ing by Agrib­ank and FBC to set­tle the Bills on ma­tu­rity, a sink­ing fund es­tab­lished and man­aged by the is­suers where the two banks will make de­posits from agri­cul­tural sales pro­ceeds on a stop or­der ba­sis, pre­scribed as­set sta­tus, liq­uid as­set sta­tus, Gov­ern­ment guar­an­tee and tax ex­emp­tion.

The Bills will con­sti­tute di­rect obli­ga­tions of Agrib­ank and FBC and will rank pari-passu among them­selves.

“Un­der this ap­proved is­sue of Agro-Bills, the is­suers, FBC and Agrib­ank, guar­an­tee in­vestors that they will re­lease funds to cover the ma­tu­rity of the Agro-Bills on ma­tu­rity dates. Agrib­ank and FBC Bank Lim­ited will keep an elec­tronic reg­is­ter of in­vestors with ben­e­fi­cial in­ter­est in the Bills.

“The reg­is­ter will list in­di­vid­ual hold­ers of the Agro-Bills,” she said.

Last year, FBC Bank Lim­ited and Agrib­ank floated $20 mil­lion and man­aged to raise the amount for last sea­son. The Bills are set to ma­ture be­tween June 20 and De­cem­ber 5 this year.

Over the past few years, some fi­nan­cial in­sti­tu­tions have raised Agro-Bills to fi­nance agri­cul­tural ac­tiv­i­ties. Last year ZB Bank is­sued $5 mil­lion Agro-Bills while CBZ Bank and the Agri­cul­ture Mar­ket­ing Author­ity raised $50 mil­lion to pay for grain de­liv­er­ies.

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