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TLG's Credit Opportunities Fund takes 49% stake in Opportunity Bank Uganda

Africa Global Funds
Oct. 13, 2020, 10:25 p.m.
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TLG Capital via its Credit Opportunities Fund (COF) has acquired a 49% stake in Opportunity Bank Uganda (OBU), a tier 1 commercial bank with 23 branches and 22 ATM points across Uganda.

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TLG Capital via its Credit Opportunities Fund (COF) has acquired a 49% stake in Opportunity Bank Uganda (OBU), a tier 1 commercial bank with 23 branches and 22 ATM points across Uganda.

OBU is licensed and regulated by the Central Bank of Uganda and offers tailor-made products and services for individuals, micro-businesses, and small-and-medium sized enterprises (SMEs).

The bank was originally a microfinance institution founded in 1995.

The transaction makes TLG the largest shareholder of OBU.

Remaining shareholders include Opportunity International Group (43%), Faulu Uganda (7%), and Food for the Hungry (1%).

TLG has been an investor in Uganda for over a decade and other Ugandan investments include Cipla Quality Chemicals (pharmaceutical manufacturing), Vero Foods (water-bottling plant) and BAJ Service Stations (fuel retail).

Isha Doshi, Partner and CFO at TLG Capital, said: “The COF was specifically set up to support quality SMEs, and we are excited to welcome OBU to the TLG family. Financial inclusion is a key aspect of development, and TLG looks forward to serving the unbanked and underbanked further.”

“OBU’s products such as the Boda Boda Loan (loan product for motorcycle riders who want to acquire or expand their business), WASH (water and sanitation loans) and the education and laptop loans fit perfectly with the impact that TLG aims to create.”

Banks and financial institutions have been hit hard across the continent due to COVID-19.

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.

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.

The expertise that TLG brings in terms of fintech will help OBU progress effectively in this effort.

Phillip Karugaba, Chairman of the OBU Board of Directors, said: “TLG Capital knows Uganda very well. We look forward to the synergies from working with TLG.”

TLG acquired its 49% stake in OBU from MyBucks SA.

Craig Lyons, MyBucks SA Chairman, said: “The sale of OBU 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 OBU management will no doubt enable OBU to grow from strength to strength. We wish TLG and all stakeholders in OBU much success in the years to come.”

Julian Thatcher, general counsel at MHMK Group, a pan-African private equity investment firm, was advisor to the deal.

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