The transaction makes TLG the largest shareholder of Opportunity Bank Uganda Ltd (OBUL).
The United Kingdom based TLG Capital (TLG) has purchased 49% of Opportunity Bank Uganda Ltd (OBUL) from MyBucks SA - according to a statement by the London based firm.
The transaction makes TLG the largest shareholder of OBUL. Remaining shareholders (all NGOs) include Opportunity International Group (43%), Faulu Uganda (7%), and Food for the Hungry (1%). The bank was originally a microfinance institution founded in 1995.
Julian Thatcher, general counsel at MHMK Group, a pan-African private equity investment firm, was an advisor to the deal for the bank which has 23 branches and 22 ATM points across Uganda.
Zain Latif, a principal at TLG Capital noted that TLG's investment was made via its Credit Opportunities Fund (COF) and marks a continued focus on building and supporting SMEs in three core sectors: Healthcare, Financial Institutions, and Consumer Goods.
TLG has been an investor in Uganda for over a decade and other Ugandan investments include Cipla Quality Chemicals Ltd (pharmaceutical manufacturing), Vero Foods (water-bottling plant) and BAJ Service Stations (fuel retail).
"TLG was founded with the belief that social development and commercial returns can and should go hand in hand. The Credit Opportunities Fund was specifically set up to support quality SMEs, and we are excited to welcome OBUL to the TLG family," Isha Doshi, partner and Chief Finance Officer (CFO) at TLG Capital said.
She pointed out that banks and financial institutions have been hit hard across the continent due to COVID-19 and that TLG believes that this makes it the right time to invest in the sector, both from a commercial point of view and from an impact perspective.
Doshi further added that TLG believes that overlaying further digital technology within the bank's product suite will expand the bank's reach and lay a stronger pathway towards including those currently outside of the financial system.
Phillip Karugaba, the Chairman of the OBUL Board of Directors, said he was excited and pleased with developments. "TLG Capital knows Uganda very well. We look forward to the synergies from working with TLG."
MyBucks SA (the selling shareholder) Chairman Craig Lyons commented: "The sale of OBUL to TLG, a well-respected investment company fits into our strategy of rationalising MyBucks SA to reduce debt and ensure the company is in a financially healthy position to grow its remaining investments."
"TLG presented a well-constructed offer that enables MyBucks to exit at an attractive value. The positive engagements between TLG and OBUL management will no doubt enable OBUL to grow from strength to strength. We wish TLG and all stakeholders in OBUL much success in the years to come," he added.