ZB keeps talks warm for $150m

Business Reporter

ZB Holdings says it has maintained ongoing negotiations with a number of global financial institutions to mobilise $150 million in fresh lines of credit. Group chief executive Mr Ron Mutandagayi said ZB has maintained “warm relations” with a number of global institutions over possible lines of credit.“We are still talking to a number of global financial institutions and we have kept those negotiations (for funding) open and very warm,” he said.

A general meeting of shareholders two years ago gave directors permission to mobilize up to $150 million to support operations and recapitalize the business. But ZB has not been able to secure interested suitors.

Mr Mutandagayi said the financial services group would also consider equity funding, as it seeks funding to support the growth of local operations.

The ZB CEO said the group was looking at a combination of equity and lines of credit to bolster operations and fund growth in an illiquid economy. He said, last year, the group tried every possible source of funding.

“We have courted anyone and everyone who has got funding. We have engaged a number of financial advisors who are assisting us with the fund raising so we are waiting for anything positive out of those fund raising.”

The Zimbabwe Stock Exchange listed financial services group is in the process of extending its tentacles in the re-insurance business into Mozambique. Earlier indications were that this will cost the group $10 million.

The ZB chief said they were going into Mozambique because it was a fast growing economy and they wanted to be part of the exciting opportunities arising there from while diversifying and expanding organically.

But Mr Mutandagayi said recently that while all approvals for the plans to enter Mozambique have been granted by Mozambican authorities, it will pursue the initiative cautiously given internal instability caused by rebels.

In the meantime, ZB said it would continue to serve the business coming out Mozambique from the Zimbabwean office, but plans are already afoot to set up office in that country, which will be run by a Zimbabwean.

This comes as ZB sought to stymie revenue trends that seemed to be tapering off, as Zimbabwe continues to face serious challenges to economic growth. As such, ZB instituted cost containment by exiting non-profitable operations and streamlining the head count, which has started paying off.