Fidelity Life has made a $2 million deposit for Langford Estate and the balance would be paid over seven years as it accelerates its housing development thrust, managing director Simon Chapereka has said.
BY BUSINESS REPORTER
Fidelity entered into a land-for-debt swap with CFI Holdings in which it would take over the latter’s debts in return for Langford Estate. The transaction is valued $18 million.
CFI owes creditors $18 million made up of banks ($16 million) and others ($2 million).
“Out of the $16 million owed by CFI to banks, we have paid $2 million. There is a two-year grace period and we have to repay the balance after five years,” he said.
This will be Fidelity’s third housing project after Fidelity Park in Manresa and Southview Park.
Chapereka said the costs of servicing the estate would be cheaper as the company will have to connect water and sewer from Southview.
During the development of Southview Park, Fidelity had to build an 11km water pipe at a cost of $2,675 million and a 6,8km sewer trench.
- 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
Chapereka said Fidelity was awaiting approval from shareholders on the Langford project, adding thatmore than 50% of the shareholders had given the project the go-ahead.
Langford Estate has approved plans for 12 000 housing units.
Chapereka defended Fidelity’s venture into property development saying it had given Fidelity Life a quantum growth on the balance sheet.
He said Fidelity bought land from Southview for $3,3 million and the cost was around $30 million. He said the project would generate over $80 million in 10 years and put $55 million into the bottom line.
“The value created will support the core business,” Chapereka said.
He said Fidelity primarily remains as a financial services company with insurance as the core business.
“It has given us the opportunity to do other things. We have utilised the funds from insurance to enhance our investments,” he said.
“As an insurer, the business is profitable. As an underwriter, we have managed to grow the business by 50%. We are happy in terms of growth.”
