Zimre Holdings Limited (ZHL) says it is targeting to raise, through its subsidiary, Emeritus International, in excess of US$80 million through the first phase of a private placement, which will enable the group to strengthen its capital base.
By Melody Chikono
A private placement is a capital raising event that involves the sale of securities to a relatively small number of select investors
Baobab Re-insurance, a Zimre Holdings Reinsurance unit, was renamed Emeritus International.
ZHL is consolidating its reinsurance operations under Emeritus Reinsurance International, as it seeks to innovatively grow its market share and profitability.
The private placement will be preceded by a listing on the Botswana Stock Exchange of Emeritus international.
ZHL chief executive Stanley Kudenga told businessdigest on the sidelines of the launch of Emeritus International that the group was looking at a capital base of US$40 million for Emeritus for it to have a strong standing.
“The first thing that we are looking at is private placement in Botswana that will boost our capital base. We are targeting around US$70 to US$80 million from the first phase of the private placement and eventual listing on the Botswana Stock Exchange which would allow us now to have a bigger underwriting capacity in the whole of Africa,” he said.
Kudenga said the placement, which is expected to be completed this year, will be followed by Emeritus’ listing on the Botswana Stock exchange which is expected to compete in three years.
“In terms of the new reconstructed balance sheet for Emeritus group we are looking at a capital base of about US$40 million which I think it is a reasonable start, but obviously going forward big players are a capital base of US$100 million, so obviously we have to up creep up to US$100 million,” he said.
Kudenga added that the starting point was growing the market share for Emeritus International and top line growth.
In the last two years, the group has been restructuring its balance sheet in a bid to to claw back market share.
“Going forward, our value proposition is going to come from the balance sheet and also growing the top line. I think we get excited in the opening up of the African economy to become a common area which offers us huge opportunities. We have challenges in some of the markets like Ethiopia, but with this opening up, it now gives us the opportunity to re-enter the Ethiopian market, Kenya markets and so forth,” he added.