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Afre to review RTG investment

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Afre says it will review its position at RTG in the next two to three years as it does not want to do a “fire sale”, a top executive of the company has said.

AFRICA First ReNaissance Corporation (Afre) says it will review its position at Rainbow Tourism Group (RTG) in the next two to three years as it does not want to do a “fire sale”, a top executive of the company has said.

Report by Victoria Mtomba

A fire sale is the disposal of goods or assets at heavily discounted prices.

Speaking on the sidelines of the company’s analysts briefing in Harare on Wednesday, Afre’s group chief executive officer Douglas Hoto said the group will for now maintain its interest in RTG.

“Our strategy is to restore confidence in the group. Now that we have resolved all the issues and have restructured the debt, we hope in 2013 it will make profits. In the next two to three years we will review the company’s position,” he said.

Hoto said the group used to own a 25% stake in RTG prior to the rights offer in January.

The group did not follow its rights resulting in its shareholding being diluted to 20%.

In the year ended December 31 2012 Afre recorded a profit after tax of $13,4 million while total revenue stood at $95,8 million. Gross premium written amounted to $88,5 million due to improved performance of the health insurance business and short- term businesses.

FML Health Care company gross written premium was $36,3 million driven by a 20% surge in membership to 79 242 from 66 259.

Tristar Insurance Company gross premium underwritten increased by 8% to $9 million with motor class being the major contributor with 43% followed by fire and accident at 20% and 20% respectively.

FMRE Property Casualty Zimbabwe registered a 15,9% growth in gross premium written to $17,6 million due to fire and farming businesses while FMRE Property Casualty Botswana gross premium was equivalent to $1,5 million.

First Mutual Life&Health gross premium written increased by 89% to $1,8 million with health having contributed 73% of the gross premium written while life contributed 22% and individuals 5%. Total assets for the group in the period under review totalled $176 million.

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