admindispose of the roofing and piping products manufacturer to an undisclosed investor to raise funding for the Reserve Bank of Zimbabwe minimum capital threshold.
Banks are required to comply with the phased capital thresholds for US$100 million capitalisation by June 2014, but were required to reach 25 percent of the threshold by December 2012. The RBZ requires banks to comply with the minimum thresholds within four six monthly phases.
FBC Holdings chief executive Mr John Mushayavanhu said in an interview yesterday that after meeting the new minimum capital requirements the company could keep Turnall for as long as it wanted.
“As we said in the cautionary statement, we have stopped discussions with the investor. We have met the (December 2012) capital requirements and so we can (now) keep Turnall for as long as we want,” he said. The negotiating parties allegedly failed to agree on a price as FBC Holdings valued Turnall at US$100 million, compared with what investors were angling for considering its market value of about US$27 million. FBC believes that the company’s stock is grossly discounted due to the liquidity crunch pervading the entire domestic economy.
FBC Holdings plans to merge its commercial banking operations with those of its building society, as part of measures to ensure that it complies with the remaining phased capital thresholds.
Presenting the Monetary Policy Statement last month, Reserve Bank of Zimbabwe Governor Dr Gideon Gono said FBC Bank was one of 14 banking institutions that had met the minimum capital requirements for December 31, 2012. FBC Bank’s capital levels amounted to US$27,97 million by December 31, 2012, against a US$25 million threshold prescribed by the central bank.
As a demonstration of its resolve to hold on to the profitable Zimbabwe Stock Exchange-listed company FBC Holdings has already facilitated the procurement by Turnall of a new tile making plant.
FBC Bank took over Turnall, formerly a subsidiary of SMM Holdings, after SMM had failed to repay an US$8 million loan. Turnall managing director Mr John Jere told Herald Business that the new tile making plant procured from Italy was already under installation at the company’s premises.
“We bought the plant from Italy at a cost of US$2,5 million. We did that to ensure we augment our capacity. The plant has a capacity to produce 45 000 tiles per day,” he said.
The newly acquired plant would enable Turnall to manufacture roofing tiles for the upper end of the market, which the firm hitherto had no capacity to supply with the kind of roofing tiles it requires.
Turnall is currently only producing galvanised corrugated, fibre cement and concrete roofing material, hence the acquisition of the new plant for a new product to tap into huge construction activity envisaged in the near future.
Online Reporter