ZB Financial Holdings headed for split

ZB Financial Holdings headed for split
Nicholas Vingirai

Nicholas Vingirai

THE ZB Financial Holdings (ZBFH) group is headed for a split amid indications that one of its major shareholder, Nicholas Vingirai wants out.
Vingirai, who through his Transnational Holdings Limited (THL) holds 19,79 percent in ZBFH, has had a fractious relationship with National Social Security Authority (NSSA) which has a 37,79 percent stake in the banking group.
Vingirai won back shareholding in ZBFH, which had taken over his Intermarket group in 2004, following a lengthy court battle.
Sources said the veteran banker, who at one time reportedly fled the country after allegedly externalising millions of dollars, has engaged lawyers to recover his assets from ZBFH.
“Vingirai has been fighting to reclaim his lost assets since 2013 when externalisation charges against him were lifted, bringing to an end one of the longest corporate fights since independence,” said the source.
“He however intensified the fight in May when his plans to increase THL shareholding in ZBFH to 26 percent — as per initial agreement with government — hit a brick wall after it was rejected by shareholders at an annual general meeting,” the source added.
Another source on Vingirai’s legal team told The Financial Gazette that they had held a series of meetings with the Reserve Bank of Zimbabwe, NSSA and other shareholders to find an amicable solution to the impending divorce.
“For the past six months or so we have held marathon meetings with all concerned stakeholders and we are now closer to finalising the split,” the source added.
Vingirai’s IHL was taken over by ZBFH in 2006 after the central bank had bailed out the investment vehicle’s subsidiaries and later converted the debt into equity under a High Court scheme of arrangement.
Vingirai suggested he was pressing for a demerger when contacted for comment.
“While I can’t confirm the existence of negotiations, I am on record stating that a demerger is the way to go. I wouldn’t have said this if I felt that I couldn’t raise the requisite capital,” Vingirai told The Financial Gazette.
Zimbabwe’s financial institutions are expected by the central bank to have a minimum capital requirement of $100 million by 2020.
Vingirai, however, believes that the current investment climate “ushered in by the futuristic business-friendly inaugural speech of His Excellency President Emmerson Mnangagwa augurs well for capital raising initiatives”.
The maverick businessman expects to regain assets such as Intermarket Banking Corporation Limited, Intermarket Building Society currently trading as ZB Building Society, Intermarket Reinsurance Limited currently trading as ZB Reinsurance, Intermarket Life Assurance Company Limited currently trading as ZB Life and Mashonaland Holdings Limited.
This will leave ZBFH with only ZB Bank and ZB Capital and transfer secretaries among subsidiaries.
Market experts, however, said the divorce could have serious negative implications on the listed financial services group which is on a recovery path after it was removed from America’s sanctions list late last year.


  • shamiso Karimadora

    Mr Editor

    Thought you were adding value to the demerger story below which first broke out on 11 December 2017, with 1 January set as RBZ set deadline for ZB bank’s demerger. Asi hamuverenge mamwe mapepa??

    December 11, 2017 Local News (The Herald)

    Darlington Musarurwa Deputy News Editor

    THE Reserve Bank of Zimbabwe (RBZ) has set December 31, 2017 as the
    deadline for the separation of ZB Financial Holdings Limited (ZBFHL)
    from Intermarket Holdings Limited (IHL), which will see banker Mr
    Nicholas Vingirai regaining his assets after a seven-year wait.

    Thursday last week, ZBFHL issued its second cautionary to members of
    the public and shareholders that discussions were presently under way
    that would likely impact on the institution’s share price.

    and members of the public are advised that ZB Financial Holdings (ZBFH
    or company) is engaged in negotiations concerning a material transaction
    which, if concluded, may have an effect on the price of the company’s
    shares,” said ZBFHL in the latest statement.

    shareholders and members of the public are advised to exercise caution
    and consult their professional advisors when dealing in the company’s
    shares until full announcement is made or this cautionary is withdrawn.”

    ZBFHL board chairperson Professor Charity Manyeruke declined to comment and referred The Herald to the RBZ.

    So, too, did Mr Nicholas Vingirai, whose investment vehicle Transnational Holdings Limited (THL) owns IHL.

    sources privy to the negotiations said last week the parties — RBZ,
    ZBFHL and THL — met on December 6 to discuss the finer details of
    bringing closure to the long-standing issue.

    It was the second such meeting following discussions on June 23 this year.

    Reserve Bank of Zimbabwe wants the matter to be resolved by December 31
    this year, and the parties are currently negotiating,” said a source.
    “There was a meeting on Wednesday, which resolved to come up with a
    clear roadmap.”

    At the meeting, which was convened at the
    central bank, ZBFHL was represented by Prof Manyeruke, its legal
    advisors and transaction advisors, Imara, while THL was represented by
    Mr Vingirai and his legal team, including financial advisors, Ernest
    & Young.

    It is understood that Government, which is
    worried about the interminable delays surrounding the deal, has taken a
    keen interest in the matter, especially considering that Cabinet
    approved the deal in February 2015.

    There is also belief
    that separating the two groups can be “straight forward” and “quick”
    considering that the businesses are separately licensed and have
    different administrative structures.deadline for the split.

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