CFI’s fortunes look up

CFI.png

CFI Holdings Ltd has narrowed losses with some of its divisions returning to profitability after a successful debt restructuring exercise that saw debt come down by 73%, the company’s majority shareholder said.

By Taurai Mangudhla

In the group’s abridged consolidated results for 2016, Zimre Holdings Ltd chairman Ben Kumalo said CFI was looking up.

Kumalo said the debt restructuring and compromise settlement agreement concluded by CFI with third parties resulted in the reduction of the associate’s debt from US$19,1 million to US$5,1 million, a move which strengthened the company’s financial position and significantly lowered finance costs.

The debt restructuring, coupled with recapitalisation of the business, pushed the company to profitability.

“Distressed operations were placed under judicial management to provide the necessary respite for the restructuring and recapitalisation of the operations,” said Kumalo in a statement.

This come after ZHL’s investment vehicle into CFI, Stalap Investments Limited, entered into a transaction which enabled it to attain a 41,5% equity stake in CFI.

Kumalo said when finalised, the group’s investment in CFI is expected to facilitate and add momentum to the restructuring and recapitalisation of CFI while unlocking value for the shareholders.

“It is worth noting that the losses from operations are narrowing and some of the operations have registered a turnaround in profitability,” Kumalo said.

He said the good 2016/17 agricultural season is expected to enhance the performance of CFI’s agro-based units.
ZHL’s total income slid 14% to US$28,1 million largely as a result of an 18% decline in gross premium written.
Net premium earned, which contributed 77% to total income, also fell by 8% due to a softening domestic insurance market and weakening local currencies in major regional markets of Malawi and Mozambique.

ZHL registered a loss of US$2,2 million, an improvement from a US$23,1 million loss in the prior year largely owing to increased business retention, cost cutting and restructuring.

Basic and diluted loss per share for continuing operations stood at 0,01 cents from 1,43 cents in 2015.

Top