ZHL intensifies restructuring drive

HARARE - Diversified group, Zimre Holdings Limited (ZHL), has begun negotiations over the disposal of certain assets as it intensifies its restructuring drive.

Company secretary Lovemore Madzinga yesterday said the firm wanted to use the disposal proceeds in new ventures.

“The company has begun negotiations over the disposal of certain assets held by the company. The proceeds of the disposals shall be utilised to support the company’s new strategic endeavours,” Madzinga said.

Last month, ZHL chief executive Stanley Kudenga announced the group was exiting Nigeria and Uganda operations where the investment holding company had 1,4 percent and 2,43 percent shareholding in Continental Re (Nigeria) and Uganda Re respectively.

The Zimbabwe Stock Exchange-listed company is also currently in discussions with an investor to buy its 49 percent stake in Guardian Reinsurance, Zambia and will exit Diamond General in Zimbabwe.

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 also said ZHL is looking at merging 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.

Kudenga said the assets were there for the turnaround strategy of the group.

“We want to re-establish that capacity to become a prominent player leveraging on a strong balance sheet and cash wallet coming from insurance,” he said, adding that the restructuring was set to create a lean structure that will leverage on ICT to deliver products.

The ZHL boss also said ZHL was going to 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.

In June, ZHL created an off-shore investment company to house its regional operations and mobilise resources for deployment in the units, as part of its restructuring.

The offshore company, Emeritus International, to be based in Botswana, will be wholly owned by ZHL with plans of listing on the stock exchange. Kudenga said the new company has already received approval from the central bank.

After operationalisation, 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.

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