ZIMRE Holdings Limited (ZHL) plans to dispose of its non-core assets and non-performing investments within the group to raise in excess of $6 million to meet the underwriting capacity requirements, the group has said. TARISAI MANDIZHA
ZHL board chairperson Benjamin Khumalo said the group would use a combination of capital raising—rights issue and disposal of non-core assets to meet the capacity.
The first part of the capital raised would be completed by December, Khumalo said, adding that the group planned to raise a substantial amount of capital through disposal of its non–core assets and non-performing investments.
“We are actually looking at raising a substantial amount of money and we are not looking at one approach to raise the capital, but one of the things we can do is leverage our real estate. I am sure you heard the chief executive [Albert Nduna] mentioning that we have got substantial assets as a group, some of it will not be reflected on the balance sheet as they sit in associate companies,” he said.
“So we want to leverage on this. We want to leverage on the real estate, but I cannot tell you how much we will raise from that particular exercise, but also we mentioned that we will be disposing of non-core and non-performing investments within the group. I think that should raise well in excess of $6 million.”
Khumalo said some of the non-core assets and non-performing investments to be disposed were within and outside the country.
Nduna said the company would buy back its shares on the stock exchange to protect shareholders.
“On the share buyback, we use it to protect your shareholding, when you find that the price on the market is too low, you buy those shares. It is a sign of confidence in the shares. Some of those might be selling at low price, thinking that the company is collapsing. As management you buy those share to stabilise the price,” Nduna said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
“If you look at the group, if you add the agro-industry assets and the other assets it’s about $280 million and the income being generated by the group its over $150 million a year. So the man who will be investing from the streets may not be aware of that so it’s up to us as the management to protect that shareholding because we know the value what the organisation can do.”
He, however, said the group was looking at purchasing not more than 5% of the shares.
In its trading update, Nduna said the group recorded a gross premium of $24 million for the three-month period to March 31 2014, which was 9% below the same period last year.
“Gross premiums for the regional business were in line with budget and were ahead of last year. Local reinsurance business, however, was below last year as it pursues its strategy of writing collectible and profitable business.”
