Zimre Holdings Limited (ZHL) is to create an off-shore investment company to house its regional operations and mobilise resources for deployment in the units, as part of its restructuring meant to create institutions to compete with rivals.
BY NDAMU SANDU
The offshore company, Emeritus International, will be based in Botswana and will be wholly owned by ZHL with plans of listing on the stock exchange. The setting up of the off-shore company has already received approval from the central bank, group chief executive officer Stanley Kudenga told analysts briefing in Harare yesterday.
First Re (Botswana), Malawi Re, Zambia Re and Moza Re will be wholly owned by Emeritus International which will determine the acquisitions and disposals in the region.
“The structure will be able to raise capital to strengthen regional operations. It gives us the capacity to be able to raise international capital from Botswana and deploying it to regional operations,” Kudenga said adding the group had received inquiries from investors who want to invest in the off shore company.
This is part of a restructuring exercise by the listed investment holding company which will see ZHL disposing of shareholding in regional companies where the group does not have control.
Kudenga said ZHL would merge its South African unit, Emeritus Re with First Re in Botswana as the South African market has become saturated and heavily regulated imposing a cost burden on operations.
He said the exit had been approved by regulatory authorities will release $1,2 million into the Botswana operation.
Kudenga said the group was currently in discussions with a potential investor to buy its 62% stake on Colonnade Re and has put on hold plans to dispose of its interest in Zep Re Kenya. ZHL has 0,98% shareholding.
“It’s a good investment which has generated good return. The thinking was we exit but with the introduction of bond notes, we are taking a cautious approach,” he said.
ZHL is exiting Nigeria and Uganda operations. The investment holding company had 1,4% and 2,43% shareholding in Continental Re (Nigeria) and Uganda Re respectively.
The Zimbabwe Stock Exchange listed company is currently in discussions with an investor to buy its 49% stake in Guardian Reinsurance in Zambia and will exit Diamond General in Zimbabwe.
Kudenga said the assets were there for the turnaround strategy of the group.
“We want to re-stablish that capacity to become a prominent player leveraging on a strong balance sheet and cash wallet coming from insurance,” he said.
The restructuring is set to create a lean structure that will leverage on ICT to deliver products. Kudenga said ZHL will insist on control in operations adding “we have learnt our mistakes on the local units”. ZHL used to have controlling shareholding in Fidelity and NicozDiamond. It lost that.