NSSA on path to improve efficiency
THE National Social Security Authority (NSSA) remains on path to improve the efficiency of its investment portfolio, and the latest development in this respect is its proposed disposal of a significant stake in Turnall Holdings and part of its shareholding in First Mutual Holdings.
NSSA is looking more towards foreign assets such as its stake in regional financer Afreximbank.
Turnall has since confirmed the proposed transaction: “The board of directors of Turnall Holdings Limited advises all shareholders that one of the company’s shareholders, National Social Security Authority (NSSA) intends to dispose its 32,5 percent shareholding in the business as part of its investments consolidation strategy,”
The pension fund currently also holds 66,22 percent in First Mutual and is now inviting interested investors to submit expressions of interest for 31,22 percent stake in the insurance company.
NSSA will keep a majority 35 percent in the group in compliance with Zimbabwe Stock Exchange (ZSE) and Insurance and Pensions Commission (IPEC) requirements.
Said general manager Arthur Manase recently: “This strategic move will see NSSA keep a majority shareholding at 35 percent in compliance with Zimbabwe Stock Exchange and IPEC requirements, while bringing in a strategic investor with solid financial resources, synergistic, technical and strategic benefits to catapult FMHL into a regional insurance powerhouse.”
The latest transaction marks the third phase of its insurance sector consolidation, which would see it offloading up to 31,22 percent in First Mutual Holdings to a strategic partner.
The first phase of this consolidation was came in 2017 and involved the merging of short term insurer NicozDiamond into First Mutual.
The transaction, which was motivated by talks with a South African insurance giant at that time, helped strengthen First Mutual’s short term insurance business and solidified its market share.
And the second phase was implemented last year after NSSA increased its shareholding in Zimre Holdings via a share swap deal.
NSSA, says the move to divest from ZB Financial Holdings (ZBFH) recently was based on the need to streamline the investment portfolio, particularly with regards to the financial services sector.
On November 13, 2020, NSSA completed the disposal of its 37,79 percent in ZBFH.
Earlier in May, the authority’s board approved the disposal of its entire shareholding in the company.
Mr Manase said then the authority was moving towards making its banking portfolio more efficient.
“The disposal was in line with NSSA’s banking sector consolidation strategy that is designed to create a leaner and more manageable portfolio that enhances stakeholder value and consistently pays sustainable dividends to NSSA for the benefit of pensioners and other vulnerable groups such as orphans, widows and widowers,” he said.
“The authority’s strategic focus is a combination of divesture and consolidation to reduce duplications, improve efficiency and minimise capital requirement while creating a formidable financial sector investment that guarantees shareholder returns, value preservation and a strategic fit into the NSSA’s mandate.”
Mr Manase added that the disposal was also to ensure that its banking portfolio is able to meet minimum capital requirements, without weighing heavy on the pension fund per se.-herald.cl.zw
