Stanley Ho’s Geocapital enters Guinea-Bissau finance sector

23 July 2007

Bissau, Guinea-Bissau, 23 July – Geocapital’s interest in acquiring a bank in Lusophone Africa has been widely reported, but following unsuccessful efforts in Angola and Mozambique, the company controlled by Macau casino tycoon Stanley Ho is now moving into Guinea-Bissau.

The Africa Monitor newsletter has reported that Geocapital bought a 60 percent shareholding in Banco da Africa Ocidental (BAO). Guinean businessman Domingues Gomes will be one of Geocapital’s partners.

Two Portuguese banks, Montepio Geral and Banco Efisa, are pulling out of BAO, as are Sequeira Braga and Carlos Gomes Junior, Guinea’s ex-prime minister.

BAO, according to Africa Monitor, is one of the few commercial banks operating in Guinea and could be used for expansion into other West African states.

Under existing agreements, BAO is allowed to open branches in members states of the West African Economic and Monetary Union (UEMOA) – Benin, Burkina Faso, Ivory Coast, Mali, Niger, Senegal and Togo.

Geocapital’s latest venture in Guinea is its second in the country after a casino resort on Caravela Island in the Bijagos archipelago, considered a Biosphere Ecological Reserve by UNESCO.

Stanley Ho presented a similar project to the Bijagos Islands scheme to the Cape Verde authorities, but this venture was blocked due to concerns over the location of the resort, a small island off the capital, Praia.

The Caravela Island tourist complex resulted in a visit to Bissau by Almeida Santos, lawyer of a former Portuguese president, who suggested with with Ho other fronts for Geocapital’s expansion, especially in Mozambique where the holding company has significant interests in the Zambezi Valley.

In Angola, Geocapital has withdrawn from investing in Banco Angolano de Negocios e Comercio (BANC) after being refused a gaming license, Africa Monitor said.

Geocapital is seeking authorization to operate a casino in the new five-star Rosa Linda Hotel, construction of which began in June.

At BANC, Ho’s company had influential Angolan partners like José Pedro de Morais and Kundi Paihama. The latter, a career soldier, runs two small casinos in Luanda’s Tivoli and Marinha hotels.

The BANC venture was geared towards Angola’s Chinese community, through private sector investment from loans or shareholding, a similar method to the line of credit created by China for Angola.

In Mozambique, Geocapital came close to purchasing Banco de Desinvolvimento e Comercio (BDC). Mozambican media reported that Almeida Santos, under instructions from Geocapital’s lawyers, contacted President Armando Guebuza in an attempt to get the venture approved, a procedure the responsibility of the country’s central bank.

Following the breakdown in negotiations, Portugal’s Montepio Geral and First National of South Africa became frontrunners in the takeover bid.

Geocapital arrives in Guinea at a time when the county is struggling to emerge from a long political crisis strongly backed by the international community, especially the European Union and United Nations.

Guinea recently received aid pledges totaling more than 21 million euros, including 4 million euros from China, which has created a financial support protocol with the country.

The International Monetary Fund has said it is attempting to urgently mobilize US$ 30 million among Guinea’s cooperation partners to provide for immediate needs and rebuilding of the country.

BAO will face stiff competition from Ecobank, which recently opened a branch in Guinea. This bank recently signed a deal to collect Guinea’s customs duties, which account for 75 percent of the country’s tax revenues.

The partnership between Ecobank and the Guinea states is aimed to boost transparency, rigor and discipline in the customs services. (macauhub)