Cambria announced it has executed agreements with a subsidiary of Johannesburg based Nisela Capital (Nisela) relating to the placement of US$ 2 million in convertible debt into its Payserv subsidiary.
Half the proceeds of the financing will remain with Payserv, the other half will flow to Cambria.
Proceeds of the financing will be used to support the growth of Payserv and Millchem, repay short term debt liabilities at Payserv, as well as for general working capital purposes.
Payserv Africa, wholly owned by Cambria, provides EDI switching services (Paynet), ‘payslip’ processing (Autopay), and payroll based microfinance loan processing (Tradanet (51% holding)). While Payserv continues to generate the vast majority of its revenues in Zimbabwe, it has made significant strides building a presence in the Zambian market.
In its recently published interim results, Cambria disclosed Payserv generated revenues and gross profit during the first half of the present financial year of US$ 2.1 million and US$ 1.9 million, respectively. This implied that over two years Payserv has grown revenues by over 1.5 times and gross profit by almost 2 times.
Certain regulatory approvals are required before funds can be disbursed and the Company can therefore not be certain the transaction will complete. It will inform shareholders as developments occur.
Cambria’s Chief Executive, Edzo Wisman, commented: “This is an exciting transaction for a number of reasons. Firstly, it evidences Cambria’s ability to add, and subsequently realize value from its investments. Secondly, in Nisela we have found a well-resourced and well-connected partner, sharing our values, and with in-depth knowledge of the Southern Africa payments industry. Lastly, we are pleased to have secured an innovative financing structure that also brings additional expertise to the table.”
Added Ian Perkins, Cambria’s Chair: “With this transaction Cambria firmly places Payserv on an accelerated growth path, allowing it to further build its presence in Zimbabwe and Zambia, and with a clear mandate to grow both its payment systems offering as well as its geographic presence.”
Comments Tatenda Mutizwa, Executive Director with Nisela: “Paynet is a Zimbabwean success story having been led by a superb management team and benefiting from the foresight, innovation and support of Cambria as its shareholder. We look forward to supporting Paynet’s management as well as Cambria in driving growth in shareholder value.”