MyBucks — Continued efforts to turn the business around

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Research: Financials

MyBucks — Continued efforts to turn the business around

In June MyBucks (MBC) announced it had successfully completed its restructuring, conducting further business disposals to reduce its debt burden. This was accompanied by several management board changes, including the departure of Timothy Nuy (CEO) who was hired last year to lead the restructuring process. Meanwhile, MBC had postponed the publication of its interim results (now scheduled for September) while its major shareholder (Ecsponent) is facing financial challenges that are partially related to MBC’s underperformance. The latter could potentially limit further equity injections if MBC requires additional funding.

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Continued efforts to turn the business around


Scale research report - Update

21 September 2020



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Total assets at 30 June 2019


Business description

MyBucks is a Luxembourg fintech company listed in Frankfurt. It provides unsecured loans, banking solutions and insurance to customers and SMEs in four African countries. It uses AI technology to assess creditworthiness and is fully integrated with local banking systems.


Large target market, with mobile and internet penetration well ahead of traditional banking.

Gradual reduction of debt burden through disposal of banking and lending operations.

Reduction of corporate overheads.


Distressed financing situation.

Weak financial position of the largest shareholder, Ecsponent.

Reduction of equity stakes in banking entities.


Milosz Papst

+44 (0) 20 3077 5700

Anna Dziadkowiec

+44 (0) 20 3077 5700

In June MyBucks (MBC) announced it had successfully completed its restructuring, conducting further business disposals to reduce its debt burden. This was accompanied by several management board changes, including the departure of Timothy Nuy (CEO) who was hired last year to lead the restructuring process. Meanwhile, MBC had postponed the publication of its interim results (now scheduled for September) while its major shareholder (Ecsponent) is facing financial challenges that are partially related to MBC’s underperformance. The latter could potentially limit further equity injections if MBC requires additional funding.

Asset disposals to reduce debt

In June 2020, MBC announced several asset disposals, which it highlights will result in a reduction of its debt to c €25m from c €108m at end-March 2019 (before it initiated the group’s debt restructuring). This includes the disposal of GetBucks, its subsidiary responsible for lending operations in Botswana based in Mauritius, to MHMK Group, which we understand remains MBC’s majority shareholder (directly and through its subsidiary, Ecsponent, a listed African private equity group, together with related parties). Moreover, MBC sold its entire equity stake in the Zambian bank and made a partial disposal of its deposit-taking microfinance institution in Mozambique (retaining 25%) to Xtenda Financial Holdings. Finally, MBC sold a 49% stake in its banking operations in Malawi to Mpatsa, a local Malawian investment holding company, which it highlights will ensure the bank will meet the local capital requirements by 31 December 2020. We understand it will also use c €6m of the sales proceeds to pay back its debt. All the transactions listed above were subject to regulatory approvals as of 23 June 2020.

Reduced exposure to banking operations

Historical data




































Source: MyBucks accounts. Note: *Net interest, fee and commission income. **From continuing operations.

These disposals may come as a surprise given the group intended to grow its banking operations in existing markets and migrate lending operations in Botswana to commercial banking licence as highlighted in the annual report published in December 2019. MBC also held a 49% stake in a commercial bank in Uganda and a 52% stake in a deposit-taking microfinance institution bank in Zimbabwe as of 23 June 2020. Zimbabwe represented c 40% of MBC’s post-tax profit in the banking segment in FY19 to 30 June 2019 (last available data). Here, the economic situation remains difficult amid hyperinflation (c 838% annual inflation rate in July 2020, as per the Zimbabwe National Statistics Agency).

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Changes to management board

The above-mentioned measures were accompanied by several changes to MBC’s board of directors since our last update note, which now largely includes individuals who previously held managerial positions at Ecsponent. The company highlights these changes are aimed at simplifying its governance structure and cost reductions. It also announced in June 2020 that Timothy Nuy will step down as CEO and will be replaced by Patrick Matute, a member of the board of directors at Ecsponent until early June 2020. The company highlights that this change follows the completion of the second phase of its financial restructuring. Timothy Nuy was MBC’s CEO until 2018, when he resigned from the position to start his own business (Finclusion Group) and was appointed MBC’s CEO again after the group initiated its restructuring in April 2019.

In parallel, Craig Lyons was appointed an active chairman of the board at MBC after he stepped down as the non-executive director at Ecsponent in June 2020. He replaced Dirk Harbecke, who joined MBC in January 2020. In July 2020, Tertius de Kock, Ecsponent’s CFO, joined MBC’s board of directors while Lutz Seebacher replaced Markus Schachner as a non-executive director in August 2020.

Major shareholder defaulting on its preference shares

We believe it is important to flag that Ecsponent, one of MBC’s major shareholders with a 42.97% stake at end-March 2020, has experienced some financial stress recently. We understand this may be at least partially due to the debt to equity conversions it agreed to as part of MBC’s restructuring. As a result, it defaulted on its preferred shares in February 2020 and, following a general meeting of shareholders held in May, class D and G preference shares were converted into hybrid preferential shares while the remaining classes were converted into ordinary shares. At the end of its last fiscal year (ended March 2020), Ecsponent had negative equity of c ZAR2.2bn (vs total assets of ZAR1.5bn) after it posted a ZAR2.0bn loss, largely as a result of MBC’s share price decline following the restructuring initiation.

On 8 September 2020, Ecsponent announced that, following an internal inquiry, its management (which was subject to some recent board changes) instituted an independent forensic investigation into possible misrepresentation on the merits and purpose of the company’s January 2018 ZAR100m investment in redeemable preference shares of VSS Financial Services Proprietary, a wholly owned subsidiary of MBC. Based on the recommendations it received from the internal forensic investigation and external legal counsel, Ecsponent has instructed its legal counsel to institute legal action against certain parties that it believes are potentially liable to the company for actions taken by them which have resulted in possible losses to Ecsponent. Importantly, the company’s claim against VSS was settled in full by MBC through the issue of MBC shares as part of the debt restructuring last year. Ecsponent’s board also recently instructed another forensic investigation into the use and distribution of funds from a US$7.5m third-party loan facility, but at this stage it is not clear if these funds were used for investment into MBC or any of its subsidiaries. In the latter case, c US$622k of interest and penalties on the facility were overdue as of 1 September 2020.

This suggests there is a certain risk that Ecsponent could refrain from further capital injections into MBC in the event it needs additional funding despite the completion of its second phase of restructuring. We note that MHMK (Ecsponent’s parent company) also has a direct holding in MBC and, together with its indirect holding through Ecsponent, has a majority stake in the company (c 63% according to Bloomberg data as of 15 September 2020). Note that, despite our efforts, the company has not provided any comments on this matter. Consequently, our analysis is based on the latest publicly available information and we are unaware of any further potential developments related to MBC at this stage.

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