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Cambria raises US$2m for Payserv unit
19/07/2013 00:00:00
by Business Reporter
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CAMBRIA Africa’s Payserv business has now received a US$2mln cash injection to support its expansion into new territories.

The Zimbabwe-focussed investment firm confirmed that the placing of convertible debt to South African investor Nisela Capital has completed.

Half the proceeds will remain with the subsidiary while the other 50% will go to Cambria.

The debt has a coupon of 15%, will mature in three years, and all or part can be converted into Payserv shares, up to a limit of 21.3% of Payserv’s equity.

Cambria describes Nisela as a well-resourced and well-connected partner with an in-depth knowledge of the Southern Africa payments industry.

Payserv generates most of its revenues in Zimbabwe but is making strides building a presence in Zambia.

In its recent interims, payroll and processing firm Payserv posted revenues and gross profit of US$2.1 million and US$1.9 million, respectively, showing it had grown revenues by over 1.5 times and almost doubled gross profit.

Assuming full conversion by Nisela, the transaction would value Cambria's remaining stake in the Payserv business, in addition to the US$1.0 million immediately extracted by Cambria and the retained full ownership of Payserv's property, at a combined US$10.3 million.

This represents a significant premium to the current book value of US$2.2 million for the Payserv business and its property.

In comparison, Cambria's market capitalisation on London’s AIM is currently US$9.0 million, and, as such, the transaction provides strong third party evidence of the concrete value within Cambria's portfolio, not fully reflected by the company's current market capitalisation.

In a note to clients stockbroking firm WH Ireland repeated a ‘speculative buy’ recommendation on Cambria following news of the transaction.

“In the short term the key focus of investors will be on the Zimbabwe elections, which could be as early as this month but the date is still unclear,” the broker said.

“The EU has promised to lift all sanctions if the election is proved to be free and fair. The shares still trade at a deep discount to our sum of the parts valuation.”


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