CBZ Moves To Boost Stake In First Mutual – NewZimbabwe.com

By Alois Vinga

ZIMBABWE’s largest lender, CBZ Holdings Limited (CBZHL) is seeking shareholder approval in a transaction which, will increase the financier’s stake in First Mutual Holdings Limited (FMHL) to 34,45%.

In a circular to shareholders this week, CBZ invited shareholders to approve the proposed acquisition of an additional 31,22% stake in FMHL currently held by the National Social Security Authority (NSSA).

“On 26^th October 2021, CBZHL and NSSA entered into a Share Purchase Agreement (“SPA”) in terms of which CBZHL shall acquire a stake of 31,22% in FMHL shares held by NSSA to be settled by a combination of cash 30% of the total purchase consideration and an issuance of new CBZHL shares to be allotted to NSSA 70% of the total purchase consideration,” the circular reads.

If agreed, the transaction will boost CBZHL’s current stake, which stands at 3,23% in FMHL.

“Going forward, CBZHL intends to consolidate its position in FMHL by acquiring a control block in FMHL, 35% as defined in section 234 of the Companies and Other Business Entities Act.

“The proposed transaction is, therefore, part of CBZHL’s diversification and consolidation strategy,” CBZ said.

The bank added the decision was reached after the board’s constant monitoring of domestic and regional trends as well as the commercial landscape to anticipate future customer needs and identify potential growth opportunities.

“The board is convinced that the proposed transaction is an investment in a future market leader in a business with complementary capabilities to CBZHL which operates within four main clusters, namely the banking, insurance, investment, and agro-insurance while FMHL has diverse interests in insurance, funeral services, and micro-finance,” the circular added.