Trust flexes its muscles

Ngoni Chanakira

TRUST Holdings Ltd (Trust) and First Mutual Ltd (FML) intend to merge several of theirbusiness operations in a major strategic partnership that could result in Trust becoming Zimbabwe’s large

st and mostdiversified fina-ncial institution.

Trust, led byWilliam Nye-mba, is currently capitalised to the tune of $73 billion on the Zimbabwe Stock Exchange (ZSE), closely following the

Zimbabwe Financial Hold-ings Ltd (Fin-hold) group, sta-nding at $79 billion.

For the period ending June 30 Trust chalked up a whopping $15,1 billion in net profit. Its inflation-adjusted profit stood at $12,6 billion, making it the best performing financial counter on the bourse so far this year.

FML, formerly known as First Mutual Life Assurance Society of Zimbabwe Ltd, is led by Norman Sachikonye and recently demutualised to transform from a mutual society into a shareholder-owned group of companies. The assurance giant officially changed its name to First Mutual Ltd (FML) last week.

Tichaendepi Masaya chairs Trust, while Ian Makone chairs FML.

Nyemba, Trust’s chief executive officer, also sits on the FML board as non-executive deputy chairman.

Trust this week told shareholders that it intended to hold an Extraordinary General Meeting on November 6 to seek approval for various strategic partnership deals.

In terms of the proposed deal between Trust and FML, Trust will take up 15% of the issued share capital of FML and further significant interests in First Mutual Asset Management (Pvt) Ltd and African Reinsurance

Company (Pvt) Ltd while FML would increase its stake in Trust to 25% and acquire significant interests in Trust Corporate Securities (Pvt) Ltd and Trust Discount House.

Trust said in order to effect the proposed strategic partnership and future transactions, it was necessary that its authorised share capital is increased and an agreed number of shares in the company and in some of its subsidiaries are issued to FML.

The financial institution said it would ask shareholders to approve special resolutions among which was for the company’s authorised share capital to be increased from $25 million divided into 500 million ordinary shares of the nominal value of five cents each, to $35 million divided into 700 million ordinary shares of the nominal value of five cents each by the creation of a further 200 million ordinary shares of the nominal value of five cents each, such shares to rank pari passu in all respects with existing shares.

Trust said it would also seek that its memorandum and articles of association be amended and that the directors be authorised to issue to FML 80 million ordinary shares in the company at a price of $245 a share to be subscribed for in cash.

Consequent upon the approval of the special resolutions to authorise and pass as ordinary resolutions that directors acquire 630 million ordinary shares in FML as its strategic partner for a consideration of $23,170 billion in terms of the FML private placement and any shares required to be purchased in terms of the underwriting agreement with FML on its rights and cash offer.

Trust said it would seek to acquire a 40% stake in First Mutual Asset Management (Pvt) Ltd for a consideration of $2,702 billion to be settled partly by transferring to FML the Trust Asset Management Division of Trust Bank Corporation Ltd valued at $855 million and the balance in cash, and to acquire a 40% stake in African Reinsurance (Pvt) Ltd for the price of $2,400 billion to be paid in cash.

The company would also dispose of the following interests to FML – a 40% stake in Trust Corporate Securities (Pvt) Ltd for a consolidation of $446 904 000 and a 40% stake in Trust Discount House for $1,2 billion, both to be paid for in cash.

Trust will also ask shareholders to authorise an ordinary resolution that its unissued share capital be placed under the control of directors who could offload them using their discretion.