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8 Miles invests in Uganda’s Orient Bank
Pan-African private equity firm 8 Miles have joined a consortium of local investors to buy Bank PHB, formerly Orient Bank Limited, a mid-tier commercial bank in Uganda, from Keystone Bank, a government-owned Nigerian bank. The consortium includes the original founders of Orient Bank who lead the consortium as well as Chinese business man who is a resident in Uganda. The bank had reportedly been making losses it had been taken over by Nigerian Keystone Bank and was on the verge of being closed by the central bank. In addition, it reportedly has 23 branches, assets worth USD173m and customer deposits of USD139m.
8 Mile have acquired a 42% stake in the bank. Even though the value of the transaction was not disclosed, this is bound to have been a larger investment than the first two deals that the fund made, an investment in a commodity exchange start up in May 2013 that appears slow to get started, and a poultry farm, the latter also in Uganda.
Financial institutions have been popular targets for PE funds and other investors across the continent. With this acquisition, however, the consortium faces a significant turnaround challenge. On the upside, the involvement of the bank’s original founders will help in this task.