Edcon, Abil pencil in deal

Johannesburg - African Bank Investments Limited (Abil) was in talks with Edcon to offer loans to the retailer’s clients, the country’s largest provider of unsecured loans has said.

The preliminary agreement was part of a “long-term strategic relationship”, the bank said on Friday.

“Credit to Edcon customers would be granted subject to Abil’s credit criteria.”

Abil, which owns unprofitable furniture business Ellerine, said in January that it was in talks with a retailer to widen its distribution network.

The deal would provide Edcon with an alternative credit provider to Absa, which bought its private label store cards business in 2012.

“This suits Edcon by not being dependent on Absa,” said Mark Hodgson, an analyst at Avior Research.

“For African Bank, it helps them go more upmarket in the customers it could attract.”

Abil shares climbed 0.97 percent to close at R12.45 on Friday. The stock slumped 50 percent last year. – Bloomberg