Chronicle Editor
Sikhulekelani Moyo, Business Reporter
THE country’s largest banking institution by assets and deposits, CBZ Holdings Limited (CBZHL), is seeking shareholder approval to acquire 31,22 percent shares from First Mutual Holdings Limited, which are being held by the National Social Security Authority (Nssa).
In early 2021 Nssa announced its intention to reduce its stake in FMHL from 66,22 percent to 35 percent through offloading up to 31,22 percent in line with its investment strategy.
In a circular released last Friday, CBZ said it got into a share purchase agreement last October in terms of which the giant financial services group would acquire a stake of 31,22 percent shares held by Nssa.
“The board is seeking approval by CBZHL shareholders with regard to the proposed acquisition of 31,22 percent stake in FMHL currently held by Nssa,” reads part of the circular, which was published on mainstream media.
“In February 2021, Nssa floated a request for proposal inviting formal bids for the acquisition of a 31,22 percent equity stake in FMHL.
“Realising the potential synergistic opportunities between CBZHL and FMHL, the board approved the company’s formal bid for the acquisition of the 31,22 percent equity stake in FMHL held by NSSA.
“In June 2021, the company emerged to be the highest bidder and was therefore granted the opportunity to enter into an agreement with Nssa for the acquisition of their 31,22 percent equity stake in FMHL,” said CBZ.
The group currently holds 3,23 percent shareholding in FMHL through a special purpose vehicle held under PIM nominees (Private) Limited and the acquisition of the additional shares from nssa constituting 31,22 percent of issued ordinary shares of FMHL would increase its total shareholding to approximately 34,22 percent.
Going forward, CBZ Holdings has expressed intention to consolidate its position in FMHL by acquiring a control block in the property and insurance firm that is, 35 percent as defined in section 234 of the Companies and Other Business Entities Act (chapter 24:31) as read with Note 2 of the twenty-ninth schedule of the ZSE listings requirements.
“The proposed transaction is therefore part of CBZHL’s diversification and consolidations strategy, said the company.
It also said the FMHL business model presents a natural fit between FMHL and CBZHL.
“FMHL is a business that has also been growing over few years, like CBZHL, is on the precipice of achieving true market domination,” said CBZ.
Meanwhile, the banking group is projected to cash in on the anticipated economic boom that will be driven by strong agricultural and mining performance.
Increased economic activity is expected in the country as the Covid-19 induced lockdown and restrictions continue to be relaxed.
Already, pockets of growth have been seen especially in the retail sector following gradual relaxation of restrictions.
Zimbabwe has implemented various levels of Covid-19 induced lockdowns and restrictions since March 30 2020 to contain the spread of the pandemic in the country.
As such, given the growing economic activity currently ongoing across key sectors, analysts IH Securities see CBZH maintaining its growth trajectory as the banking group continues to tap into the improved economic activities, including agriculture and mining.
In the first half of 2021, the agri business segment made up 60 percent of the CBZ’s loan book.
The loan book was primarily short-term with 90 percent of loans maturing within a period of 12 months, in line with the financial sector’s cautious approach to long term lending.
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