Zimbabwe signs $1bln capital raise deal with American hedge fund

Shawn Matthews
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HARARE,– Zimbabwe on Thursday signed a Memorandum of Understanding with an American hedge fund, Hondius Capital Management, to raise $1 billion for infrastructure development in key sectors including energy, water, agriculture and mining.

Zimbabwe has struggled to get financing from regional and international institutions since it started defaulting on foreign debts in 1999 under former president Robert Mugabe.

President Emmerson Mnangagwa, who took over when Mugabe was forced to resign in a de facto coup last November and won a disputed election in July, needs foreign capital to revive an economy that stagnated under Mugabe.

Hondius Capital was started this year by Shawn Matthews after he left investment banker Cantor Fitzgerald LP — where he headed its broker-dealer unit — in April.

Matthews’ former employers are involved in his venture as one of its prime brokers.

Hondius’s Jack Heffernan said a 12 man delegation from the Zimbabwe had visited the firm last month to carry out due diligence.

“We are dedicated to this, we want success and we can’t wait to get started,” said Heffernan.

The deal was signed between Hondius and the Zimbabwe Infrastructure Development Bank.

The agreement commits government to contribute $200 million and Hondius the balance.

“The funding will be mobilized from international investors, money markets a total of $800 million. This infrastructure development fund will be managed through IDBZ in support of infrastructure in energy, water, ICT, housing, manufacturing, mining and agriculture,” said One Stop Investment Services Centre chairman, Washington Mbizvo.

“There are a lot of projects and there is money to support them but it is important that the projects themselves are properly set up and bankable. We should be able to raise $1 billion in a short time. There is good will. There is appreciation that Zimbabwe is heading in a different direction, we are saying things that are credible.” – The Source