RBZ sells non-core assets

operations to its core functions.
The sale of the shares is expected to finance its debt overhang.
The move comes as the central bank is rationalising its staff complement and refocusing on its core functions as a monetary authority. The bank’s major role is to create and enact monetary policies.
“Consistent with the Reserve Bank of Zimbabwe Act (Chapter 22:15), which requires that the RBZ disposes of its assets not related to its core functions, the bank notifies the public that it intends to dispose of its assets, consisting of shares that the bank holds or controls in various listed and unlisted companies,” said the RBZ statement.
Indications are that the proceeds could be used to clear the bank’s liabilities of about US$1,2 billion, of which 65 percent was inherited from previous administrations.
RBZ holds a 58,75 percent stake in Tractive Power Holdings and 64,9 percent in Astra Holdings, both listed on the Zimbabwe Stock Exchange.
Tractive Power demerged from the Astra group in 2001 when 33 percent of the group was floated. RBZ controls Astra and Tractive Power through the Finance Trust of Zimbabwe.
Astra has interests in paint, steel and chemicals through its 50 percent joint venture with Hippo Valley. Tractive Power has Barzem, a joint venture with Baloworld South Africa, Farmec and Puzey & Payne.
The group also controls Northmech Zim through a joint venture with Invicta Holdings of South Africa.
RBZ is also the major shareholder in Tuli Coal (Pvt) Limited, controlling 70 percent and 100 percent of another mining operation, Carslone Enterprises Limited.
The central bank also plans to dispose of Homelink, a housing development scheme and a money transfer agency.
Sirtech Limited, which is into manufacturing, scientific research and industrial development, where RBZ holds a 65 percent stake, has also been put on the list of disposals.
The disposal of a 50 percent stake in Transload, which deals with bio-diesel, completes the list of the seven companies up for sale.
RBZ also owns 64 percent of Cairns Holdings, which did not appear on the list of assets to be disposed of.
Herald Business could not determine the net asset value of the investments but indications are that it could fall short of the funds required to settle the bank’s debts.
The debts were accumulated from critical national programmes such as support for agriculture, procurement of maize, medicine, supporting elections, parastatals, State enterprises, Govern-ment ministries, agencies and departments.
During this time RBZ used foreign currency from non-governmental organisations and company accounts.
Banking institutions would have to be restituted US$83 million for the statutory reserves used by the RBZ.
The central bank must also compensate corporates to the tune of US$80 million and NGOs US$20 million for money used to mitigate the effects of sanctions.
According to the central bank, US$184 million was used to settle Zimbabwe’s arrears with the International Monetary Fund.
The RBZ also owes the Reserve Bank of South Africa US$10 million, Equatorial Guinea US$222 million for fuel supplies while Malawi central bank is owed US$20 million for funds extended to cover critical national programmes.