ZB Financial Holdings Limited could be close to sealing a deal with Indian investors as the institution seeks funds to recapitalise the operations of the group, NewsDay Business has established.
Report by Victoria Mtomba
Informed sources told this paper that the investors were already in the country to kickstart negotiations.
As part of measures to consolidate its revenue base, the group also plans to complete the merger of ZB Bank Limited and ZB Building Society before the end of the current financial year in order to achieve “efficient capital deployment”.
“The group is courting Indian investors and they are carrying out due diligence,” sources said.
The investors are expected to bring in some funds for the recapitalisation of the group.
On Wednesday, ZB issued a cautionary statement advising about the ongoing negotiations fuelling speculation it could be close to a deal.
In the cautionary statement, ZB advised shareholders should be cautious when dealing with the institutions shares.
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“ZB Financial Holdings Limited advises all its shareholders that the company is engaged in discussion which, if successfully completed, may have a material impact on the company’s business and share price,” the company said in a cautionary statement.
Sources also revealed that the group was working on an exit package for its chief executive officer Elisha Mushayakarara.
Efforts to get a comment on the ongoing negotiations with potential investors from ZB were fruitless as they had not responded to questions sent on Tuesday.
Mushayakarara has served the institution since 1993 when he joined the group.
In an interview at the sidelines of the Zimbabwe High-Level Investment Conference in Johannesburg last week, ZB Financial Holdings chief operating officer Ronald Mutangagayi, however, denied Mushayakarara was leaving the company.
“There has been speculation on the departure of the chief executive, but there is nothing like that,” he said.
ZB Financial Holdings was among companies that were on the European Union sanctions list and has since been removed.
Group chairman Bothwell Nyajeka, in a statement accompanying ZB’s financial results for the year ending December 31 2012, said efforts towards the recapitalisation of operations had reached advanced stages.
ZB Bank capitalisation level stood at $32,34 million as at December 31 2012.
The group posted an after-tax profit of $7,8 million, up 11 % from the prior year, while ZB Bank recorded an after-tax profit of $5,6 million, down 34% from the prior year attributed to normalisation expense on the cost base as some of the expenses were deferred in the previous financial periods.
