NMB snaps up 40pc ZHL stake

HARARE - NMB Bank Limited (NMB) has acquired a 40,16 percent stake in Zimre Holdings Limited (ZHL) after taking up nearly 82 percent unsubscribed shares in the insurance group’s $15 million rights issue.

The bank underwrote the rights issue — aimed at raising funds to strengthen ZHL’s capital base and finance business growth — which was 18,03 percent subscribed, indicating effects of the acute liquidity crisis prevailing in the market.

“NMB now has a 40,16 percent shareholding in ZHL after the undersubscribed rights issue,” ZB Transfer Secretaries managing director Robert Mutakwa told Business Live.

As at August 31, 2014, the government of Zimbabwe held 42,8 percent in the group, National Social Security

Authority 19,08 percent, investment vehicle Lalibela Limited NNR 10 percent while others accounted for 28,11 percent.

Under the rights offer, the group  — also involved financial services and property — offered 750 million shares to existing shareholders at $0, 02 each.

The capital raising exercise was approved at an extraordinary general meeting held last month.

“The additional capital to be raised through the rights offer will enhance liquidity and strengthen the reinsurance capital base and subsequently increase underwriting capacity, support business growth and position the company’s… to compete effectively in the domestic and regional markets,” the group said prior to the exercise.

The recapitalisation was also expected to strengthen ZHL’s international credit ratings for its insurance units.

This comes as the group in September last year said it was mulling delisting from the Zimbabwe Stock Exchange (ZSE), as no benefits had been realised from listing on the local bourse.

Its chief executive Albert Nduna said while the group would temporarily shelve the delisting until completion of the rights issue, the plan remained on the cards.

He said stocks were undervalued while it is increasingly difficult to raise capital on the 62-counter bourse.

“The valuation of shares on the ZSE worries shareholders and managers to the extent that some are advocating delisting,” he said.

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