By Margot Patrick
LONDON-- Bob Diamond is looking like the last person standing at Atlas Mara Ltd., the troubled African banking group he co-founded three years ago.
Atlas Mara's chairman left in December and its chief executive, John Vitalo, abruptly stepped down Wednesday. On Thursday, the bank said it was cutting costs and had raised $13.5 million through a share placement to invest more in financial technology and a markets and treasury business.
In a show of support, Mr. Diamond bought a chunk of the new stock, raising his stake to 3.28% from 2.5%. He is acting chairman at the group while it looks for a replacement chairman and CEO.
The company didn't say why Mr. Vitalo left and he didn't immediately respond to a request for comment. The former chairman, Arnold Ekpe, left last year to concentrate on other interests.
Atlas Mara was Mr. Diamond's big project after resigning as CEO of Barclays PLC in a 2012 scandal over alleged interest-rate rigging by bank traders. The company floated on the London Stock Exchange at $10 a share in December 2013, and in two shares offers raised $625 million to buy banks in seven African countries.
Mr. Diamond's co-founder in the company is Ashish Thakkar, a Dubai-based entrepreneur. They didn't foresee that commodity price falls would hit many African economies, pushing up bad loans at some of Atlas Mara's banks and causing its share price to fall. That stymied Atlas Mara's original plan to buy more banks by raising additional equity. The new shares were placed at $1.91 apiece and the stock traded at $2.12 Thursday.
The group's latest acquisition, of Finance Bank Zambia Ltd. in July, was paid for with cash from a loan to an Atlas Mara subsidiary by the Overseas Private Investment Corporation, the U.S. government's development finance agency. Atlas Mara qualified for the loan because some of its biggest shareholders are based in the U.S., although it is registered in the British Virgin Islands.
With a market capitalization now of around $164 million, some Atlas Mara shareholders have privately urged Mr. Diamond and the board to consider selling or breaking up the group, people familiar with the matter said. Private-equity firms have been approached about a potential transaction involving Atlas Mara, according to people familiar with those discussions, but nothing has been firmed up.
Write to Margot Patrick at [email protected]