Zimre in talks over assets disposal Zimre Holdings has major projects in the pipeline in Zimbabwe and the region

Business Reporters
LISTED financial services group, Zimre Holdings Limited (ZHL) has begun negotiations which will culminate in the disposal of some of its assets to fund future growth. Yesterday, the company published a cautionary statement saying it is in negotiations over the disposal of certain assets held by the company.

While the company did not mention the said assets, sources say it is looking at disposing its 30,03 percent shareholding in Nicoz Diamond to the National Social Security Authority (NSSA) which will allow the latter to prop up its total shareholding in Nicoz Diamond to 80,92 percent from the current 50,89 percent.

The Herald Business also understands Zimre is looking at disposing its regional operations in markets such as Nigeria, Uganda and South Africa.

Sometime in May, ZHL’s group chief executive, Stanley Kudenga expressed his company’s intention to trim its regional investments as part of a five-year strategy. Mr Kudenga told analysts at that time that the group was planning to trim non-profitable and non-strategic regional and local operations as well as consolidate operations in markets that are attractive. He added that the company was working on exiting the South African market, which it regards as mature.

“The exit strategy from Emeritus Re has already been approved by the Financial Services Board of South Africa and the transaction is expected to unlock $1,2 million,” said Mr Kudenga adding that the funds will be deployed to consolidate operations in Botswana where ZHL owns First Re Botswana and is also planning to create an offshore investment company Emeritus Reinsurance International Limited.

Mr Kudenga also highlighted that the group is exiting from Continental Re in Nigeria, where it has a 1,47 percent stake, and will utilise the proceeds to consolidate operations in Mozambique where it has a 51 percent stake in Mozambique Re.

ZHL is also planning to exit from Uganda Re where it holds a 2,43 percent stake. In the cautionary statement signed off by company secretary Lovemore Madzinga, ZHL said, “the proceeds of the disposals shall be utilised to support the company’s new strategic endeavours.”

This fits into Mr Kudenga’s statement then, when he said “proceeds from the disposed investments are to be invested into other subsidiaries, mainly in Malawi and Mozambique.

Part of the strategy, The Herald Business understands, will also be around Emeritus Reinsurance International Limited.

According to chairman Ben Khumalo, in emailed response to questions, Emeritus Reinsurance International Limited, which is already registered with the Botswana International Financial Services Centre (IFSC), will be used to grow the regional businesses.

“Most of our regional operations are under-capitalised so we are going to use Emeritus to raise off-shore and on-shore capital to fund them,” said Khumalo adding that Emeritus was a better vehicle to use than Zimre.

“The name Emeritus is not country specific unlike ZimRe which people immediately associate with Zimbabwe and whatever bias or country risk they may associate with Zimbabwe.”

“We noted some resentment in some regional markets we operate in towards the name ZimRe, in some cases due to nationalistic sentiments and also because of the sanctions burden. We have decided to nurture and exploit the Emeritus brand,” said Mr Khumalo adding that the company is considering eventually re-branding all its regional operations under the Emeritus brand.

“This will enable us to attract off-shore capital as well as exploit group synergies through economies of scale for example when organising Treaty Programmes,” he said.

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