TN Bank likely to gain shares in Afre

million rights offer.
The Zimbabwe Stock Exchange-listed group is in need of fresh working capital to recapitalise its life insurance business, sources said.

Earlier, the group proposed to float a US$10 million rights issue but the plans collapsed over concerns that Afre and some of its subsidiaries might have been involved in illegal inter-party transactions.
The transactions had their origins in loans the companies received from Renaissance Bank. This prompted investigations by the Commissioner of Insurance.
Renaissance has since been placed under curatorship. Afre sources indicated that a board resolution was made to recapitalise the company through floating a US$15 million rights issue.

“The board has resolved to go for a rights offer to recapitalise the group. The board deliberated on the amount, taking into consideration the group’s exposure to related firms,” said one source.
Initial indications were that Afre was exposed to the tune of US$6,4 million. Afre chairman Mr Tawanda Nyambirai confirmed the developments. But he said the rights offer would require approval from the Commissioner of Insurance, which is probing the group.

“The board has approved the rights offer, but we need to notify the Commissioner of Insurance which is probing the group’s subsidiaries,” he said.
In previous, interviews Mr Nyambirai said the board would ensure the group was well-capitalised
He said: “We need to move in quickly and cover that (the exposure) to ensure that the company can carry on with its business.

“We have given the assurance to clients that we will support the rights offer and we will be there all the way.”
It has been previously reported that Econet was likely to underwrite the exercise, which might have resulted in the mobile phone company assuming a controlling stake in the life assurance group.
Econet is the major shareholder with about 20 percent shareholding.

Former executive chairman Mr Patterson Timba was forced to leave from the group after failing to repay US$12 million to businessman Mr Jayesh Shah.
The money is reported to have been borrowed to recapitalise Renaissance Bank to meet the prescribed capital levels.