ZB gets the nod in Moza

Business Reporter
ZB Holdings has reportedly obtained approval from regulatory authorities in Mozambique to establish a reinsurance business, paving the way for it to spread its tentacles in the fast growing economy. Chief executive Ron Mutandagayi confirmed the development, but pointed out that the financial services group was yet to receive official written confirmation from the Mozambican authorities.

“The application has been approved, but we are waiting for the official written confirmation,” Mr Mutandayi said in an interview yesterday. The ZB Holdings group CEO said in June that applications had been made to the regulatory authorities of the Southern African country’s insurance industry and had only been awaiting approvals. Once the approvals were obtained, he said, the Zimbabwe Stock Exchange listed financial services group would get the ball rolling.

Mr Mutandagayi said the financial services group, looking to streamline its businesses to focus on core operations, required $10 million to fund the foray into Mozambique.

Overall, the group also targeted raising a total of $150 million to support domestic operations and also build critical mass in volumes.

The group received shareholder approval to raise the funds at an annual general meeting of the company held at the beginning of June this year, which would also help fund the venture into Mozambique. The expansion of ZB’s reinsurance business footprint into Mozambique is meant to grow its revenues and help diversify its portfolio.

“It is very important . . . at the moment it contributes about 10 percent of our revenue and income, but if we are able to expand it that will obviously assist us in shoring the local business, it is an important part of the group,” said in an interview earlier this year.

ZB moving into Mozambique as it is a fast growing economy and the group would want to be part of the exciting opportunities arising while diversifying the business and expanding organically.

In 2014, Mozambique’s economy continued to perform strongly with real Gross Domestic Product growth of 7,6 percent and the outlook remains positive. Sustained growth is expected at 7,5 percent in 2015 and 8.1 percent in 2016. As in previous years, the main drivers of growth will continue to be public expenditure and Foreign Direct Investment.

Yesterday, Mr Mutandagayi also briefly spoke on the group’s efforts to raise funds through a combination of equity and lines of credit to bolster operations and fund growth in a very illiquid economy.

“We have not been able to find anything. We engaged a lot of investors, but we have not been able to close any deals, we are still engaged in negotiations, capital raising is a long process,” he said.