Reinsurance group Zimre Holdings Limited sees growth in its local and Mozambique businesses after shareholders approved a US$15 million rights offer to boost the group’s underwriting capacity, group chief executive officer Albert Nduna said on Wednesday.
At an extraordinary general meeting, ZHL approved the proposal to offer 750 million shares at a subscription price of US$0,02 each payable in full on acceptance.
Nduna said the recapitalisation of the group would also enhance international credit ratings for its reinsurance units.
“Without capital it was becoming very difficult to operate in the region because you are operating small capitalised entities and in today’s world, size matters and ratings agencies are sensitive to that,” Nduna said in interview with The Source.
“Those are the things which we have corrected with this capital raising initiative. The funds will be used to strengthen reinsurance operations both local and regional. We are in Mozambique but the capital level needs to be strengthened and that is what we going to do because locally the problem was not the strong balance sheet but liquidity, the structure of the assets which were hard assets.”
He said in economic boom in Mozambique would drive growth but expressed concern over fluctuating Malawi Kwacha, which he said could affect operations.
Nduna hinted that ZHL could in future seek additional capital to grow the business in South Africa.
“South Africa is highly competitive and it needs a lot capital and we are looking at it. As you know South Africa is 80 percent of the insurance market (in Africa) and you have to be there,” Nduna said.