HomeNewsAfre plans to float $15 million rights offer

Afre plans to float $15 million rights offer

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Africa First ReNaissance Corporation Limited (Afre) plans to float $15 million rights offer next month to recapitalise its subsidiaries to strengthen its balance sheet and to pay off its internal debt.

Afre group chief executive officer Sibusisiwe Ndhlovu said the money would be used for recapitalisation of First Mutual Reinsurance (FMRE) (Property and Casualty) Zimbabwe and FMRE (Property and Casualty) Botswana and Tristar Insurance.

“Tristar is currently retaining 20% of its business and we need to beef up the balance sheet. We are falling short on the retention average for reinsurance which is 54%,” said Ndhlovu.

“We had success with shareholders. We believe the business is there and we have secured an appropriate underwriter,” Ndhlovu said.
The funds raised through the rights offer would also be used for restructuring of internal debt.
For the six months ended June 30 Afre returned to profitability after posting after tax profit of $4,6 million indicating a 165% from a loss after tax of $7,2 million last year.
Shareholder loss for the period went up by 50% to $2,4 million compared to a loss of $1,62 million for the same period last year.
During the period under review policy holder funds rose to $57 million.
The group recorded a gross premium income of $42,9 million from $26,4 million same period last year while life assurance and medical savings business contributed $27 million.
Total assets for the group stood at $152 million from $130 million last year.
Short-term insurance and reinsurance gross premiums contributed $15,9 million.
The group reinsured $8,3 million of the gross premium written achieving a net premium of $34,6 million compared to $20,5 million last year.
Rental receivables for the group declined to $439 000 compared to $1,1 million in June to the group’s debt recovery efforts and provision for potential credit losses of $713 000.
“The group’s recovery efforts which include negotiating payments terms with tenants as well as instituting legal actions against defaulters have been bearing dividends albeit at a slow pace,” the group said.
Ndhlovu said the group would be disposing its 23% stake in the Rainbow Tourism Group as the investment was no longer viable. The stake, involved 15,9% of policy holders’ fund and 7,9% is for shareholders .

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