| January 2, 2002
Austral Bank handed over to ABSA
The Amalgamated Banks of South Africa (ABSA) on 31 December took control
of Mozambique's troubled Austral Bank, paying $10 million for 2.52 million
shares - 80 per cent of the bank. The sale contract was signed at Austral
headquarters by Maria Otilia Santos, head of the government commission that
negotiated the reprivatisation of the bank, by Godfrey Johnson, head of the
ABSA Africa Desk, and Alex Schaffrath, of ABSA corporate finance.
This is the second privatisation of Austral. Under its former name of
the People's Development Bank (BPD), 60 per cent of the bank was sold to a
Malaysian/Mozambican consortium, headed by the Malaysian Southern Bank Berhard
(SBB), in 1997. Three years of ruinous mismanagement followed, and by 2001
Austral was sinking under a mountain of bad debt. At a shareholders meeting in
April, SBB and its Mozambican partners refused to recapitalise the bank, and
simply handed their shares back to the government. The Bank of Mozambique
stepped in at once, and appointed a three member provisional board of directors
to run Austral.
The new board, chaired by Antonio Siba-Siba Macuacua, who was formerly
head of the central bank's banking supervision department, was charged with
ascertaining the true financial position of Austral, and preparing it for a
fresh privatisation. ABSA won the privatisation tender, and pressed ahead with
negotiations, despite the murder of Siba-Siba on 11 August. The handover of
Austral to ABSA was delayed while ABSA awaited authorisation from the South
African National Reserve Bank, which was not granted until 6 December.