KINGDOM Financial Holdings Limited is expecting to raise an estimated US$10 million from the disposal of its Malawi investments, the proceeds of which would go towards the group's recapitalisation. The group owned a 38,15 percent shareholding in First Discount House Financial Holdings of Malawi before the fallout with the neighbouring country.

But the transaction is under legal review and the group is confident of a successful outcome.Announcing its exit from Malawi, Kingdom said it had identified an investor to take up a significant stake in the group and is awaiting regulatory approval.

"We have identified an investor and all that remains is to finalise the outstanding regulatory and other corporate governance issues before we make an announcement," the group said.

Kingdom said it was unfortunate to exit Malawi, but the positive outcome of the disposal would be to invest the funds in Zimbabwe to further strengthen its financial position.

The group's banking unit was given a special dispensation by the Reserve Bank of Zimbabwe to comply with minimum capital requirements by next month.

It is understood that the new investors are well-capitalised and would help Kingdom to expand its own business, and, more importantly, open new business and market opportunities to benefit the group.

These developments come at a time when the group is in the process of raising US$25 million to capitalise its operations.and meet the central bank's capital requirements of US$12,5 million.

Kingdom has been battling to recapitalise its operations after estranged partner Meikles Limited withdrew its deposit of US$11,5 million.

As at June 30, 2011 the bank was capitalised to the tune of US$2,7 million, instead of the required US$12,5 million.

Reserve Bank of Zimbabwe Governor Dr Gideon Gono said in his monetary policy that Kingdom would raise US$15 million by October 31, 2011 and expected to meet the capital threshold by February 7,next year.

"Kingdom Bank is and has continued to be operationally sound as it has been meeting its obligations," he said..

"The success of the recent rights offer has further bolstered its operational soundness and the group has currently agreed with an external investor awaiting final regulatory approval."The transaction is due soon and is expected to inject US$10 million.

To this effect, the shareholders made a resolution to raise an additional US$10 million through issuing 6 640 106 redeemable convertible preference shares at US$1,506 per share.

Already, Kingdom has raised US$4,5 million and the remainder would be raised through a combination of a private placement and debt.