Monday, 31 January 2011

Blue Finance - Le coq sportief a l'Afrique e tout le monde

Peace of Mind!!!!  mmmmm

Blue Financial Services Limited (Blue) is a true-blue, South African -based company. The claim is that they are a company who are a financial services supplier, providing ethical and credit solutions to people within Africa. A very strong worded statement; easier to say than do.

They operate in Botswana, Cameroon, Kenya, Lesotho, South Africa, Switzerland, Tanzania, Uganda and Zambia.  Not bad for a hard working bunch of okes!!!

During the fiscal year ended February 28, 2010, it had suspended operations in Cameroon and Rwanda, reasons as yet unknown. Their product offering include personal loans, short term loans, education loans, home loans, home improvement loans, debt consolidation and handset finance. Blue offers bonded home loans through Blue Home Loans, a division of Blue Financial Services Limited. Blue is listed on two stock exchanges: The JSE Limited (share code BFS) and the Botswana Stock Exchange (share code Blue).

Mayibuye Group (Pty) Ltd, a South African investment company, entered into an agreement with Blue Finance to provide ZAR 450 million (USD 58.6 million) in equity and debt financing. As a result of this recapitalization Mayibuye now owns 65 percent of Blue.

Mayi "blue" ooops Mayibuye’s turnaround strategy also aims to reduce costs and credit risks and improve corporate governance and risk management. Mayibuye appointed a new CEO Johan Meiring replacing Dave van Niekerk.  I think this is what investors are looking for.

They hope that loss-making Blue Financial Services will be profitable by February 2012 Under Meiring's guidance.

Though we have not heard much about the causes of the financials crisis one cannot help but speculate that it was caused by its lending policies and of course the credit crunch, also crunched them. They lost their operating license in Rwanda under allegation of fraud by the Reserve of Rwanda. The question is did this also contribute?

Continuing with its bid to recover from its financial crisis which they saw themselves in last year, Blue Finance has granted Existing Lenders the option to convert the whole or a portion, up to a total aggregate amount of R325 million, of the amounts owing to them into Blue ordinary shares ("Ordinary Shares"), at a conversion price of R0.13 per Ordinary Share ("Early Conversion").

International Finance Corporation confirmed converting the entire principal amount owing to it of circa R60.5 million. Furthermore, Renaissance Africa Master Fund Limited ("RenAsset"), being one of the Company`s existing lenders also confirmed that it will be converting the entire principal amount owing to it of circa. R44.4 million (under the Early Conversion).

ABSA Bank Limited has advised the Company that it will also be converting the entire principal amount owed to it by Blue, of circa. R37.4 million (under the Early Conversion). This is in addition to the confirmation received from the Nederlandse Financierings Maatschappji voor Ontwikelingslanden N.V. (Dutch Development Bank), advising Blue that it will be converting a portion of the principal amount owing to it of circa. R80 million (under the Early Conversion).

With this in mind I think we can all agree with the CEO of Blue Finance Mr. Meiring that the turnaround for Blue Finance is on course.

Thanks Lindy, a nice bit of insight.....True Blue !!!

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