Sanctions exit unlocks funding taps for ZHL

Zimre Holdings Limited (ZHL) is making progress in unlocking funds that were tied up after the group was placed under the US Treasury Department’s Office of Foreign Assets Control (OFAC) sanctions list.

With the group coming off the OFAC list in 2017, it has so far unlocked US$0,7 million that will go towards recapitalisation of the group as it continues with its restructuring process.

Said chief executive Stanley Kudenga during the company’s briefing on Monday: “Exiting the jaws of sanctions paved way for the release of blocked funds amounting to US$0,7 million with efforts to recover the outstanding US$1,1 million still underway.”

The group is implementing a process that will result in the restructuring and remodelling of its business portfolios in line with its new culture which places “emphasis on sustained value creation through cash generation, customer focus, and change management.”

Mr Kudenga admitted the group had made mistakes along the way, and is now working to correct those mistakes.

“We lost control of our wallets somewhere along the way, we also tried to become a conglomerate and to go into other areas that were far away from the value chain of our insurance business; that is why you find we are still in agro, we are still in CFI, and that teaches you a lesson when you venture into an area that you really have no control of.

“We know insurance and we can tactfully play the insurance sector. The same way we almost lost control of Fidelity, and there was a bit of a haggle as to where we were going to place Fidelity, but we won the war in terms of our negotiations with NSSA because it’s an asset area we understand.”

He added: “But as we speak now, we are facing difficulties in terms of closing our case with CFI because by-and-large it’s an area that is really not in our fold.

“So as a conglomerate we have not really been successful, and as we move to redefine ourselves we will stick to what we know.”

The group has already acquired 100 percent shareholding of Zimre Property Investments Limited (ZPI), which culminated in the de-listing of the company from the Zimbabwe Stock Exchange (ZSE) as well as the acquisition of majority interest in Fidelity life Assurance of Zimbabwe Limited.

In terms of other restructuring, ZHL disposed of 85 percent in RBI and 62,23 percent in Colonnade Re, 8 001 shares in IDBZ, 316 shares in Uganda Re and 1,8 million shares in ZBFH.

Other strategic disposals are expected to finance new growth initiatives, and these include: the disposal of the group’s 1,47 percent shareholding in Continental Re to strengthen the capital base in MozRe; disposal of 30,03 percent stake in NDI to NSSA for $7 million to propel acquisition and strengthen Credsure; to fund ZPI share acquisitions on ZSE and building the external claims fund for Reinsurance.

ZHL also disposed of Zimre Centre for US$10 million to build Sawanga Mall in Victoria Falls, which is now worth US$24 million.

For FY2020, in inflation-adjusted terms ZHL’s total income at $2,8 billion grew by 11 percent over the $2,5 billion achieved in the same period in 2019.

But on a historical cost basis, total income increased by 584 percent from $0,6 billion in 2019 to $4,4 billion in 2020, attributable to “the strong top-line growth in premium income in Mozambique and Botswana as the units consolidated their respective market positions, the growth in rental income with the coming on stream of property space with high rental yield and the upward reviews of rentals as well as property revaluation gains following the change of functional currency.”-herald.cl.zw