HomeBusiness DigestZimre joins the 'trillion dollar elite'

Zimre joins the ‘trillion dollar elite’

Roadwin Chirara

ZIMRE Holdings this week became the latest listed company to announce that its asset portfolio had grown to a trillion dollars.

sans-serif”>Other listed companies to notch a trillion dollar asset base include Innscor Africa and OK Zimbabwe.

Zimre announced at an analysts’ briefing yesterday that the company’s assets for the half-year to June 30 had gone up by 165% to $1,09 trillion.

Analysts say this trend on the stock exchange is likely to continue, with companies increasing their asset bases to the trillion dollar mark due to revaluation based on inflation. In its half-year-end results the company said it was still planning to list its property company but would wait until its value grows to about $400 billion.

Zimre chief executive officer, Albert Nduna, said the company was currently restructuring its property arm in line with future plans of a possible listing.

“There are still issues that have to be dealt with before we consider listing the company. Currently, we are looking at issues of restructuring the company in line with our future plans,” Nduna said. He said the company would also consider increasing Zimre’s property portfolio before approaching the market with a possible listing.

“There are factors to do with the current assets of that company,” he said. “We believe we first have to also grow its assets base so as to provide an attractive investment opportunity to the public to invest.”

Zimre properties are currently valued at $205 billion. He said the company was still pursuing its regional expansion drive in sectors aligned to insurance and the financial services sector.

“We are still going ahead with our regional plans which will focus on mainly the insurance and the financial services sector,” said Nduna.

He said the company was still to conclude its deal with an unnamed South African company with regards to its interest in Southern Union Reinsurance (Sure).

In the deal, Zimre is looking at reducing its stake in the South African-based company to 40% from the current 100% in exchange for the recapitalisation of the company.

On conclusion of the deal, the company will no longer be accounted for as a subsidiary of Zimre, but its income will be accounted for as part of the group’s total investment income.

“We moved into the South African market at the same time with other players and as time went on, we found ourselves on a short position, but on conclusion of the deal the company will disappear from our balance sheet and would be accounted for under investment incomes of the company,” said the Zimre head.

He said the company’s asset management business, Fidelity Asset Management (Flam), was adequately capitalised.

“The survival of any asset manager depends on the size of its book, and if you look at Flam it is adequately capitalised and benefiting from being part of a big organisation,” said Nduna.

He said the company was still awaiting the Kenyan government’s decision with regards to its management contract with the Kenyan National Assurance Company (KNAC).

Zimre’s subsidiary, Fidelity Life, was contracted by the Kenyan government to manage its insurance company, KNAC, but the government is still to renew the contract.

“We are still waiting for them to tell us the way forward. But as you know, they (the Kenyan government) have retained the day-to-day operations of the company,” Nduna said.

Zimre closed the half-year with a profit before tax of $296 billion, a marked increase of 382% compared to last year’s figure of $61 billion.

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