RENAISSANCE Financial Holdings Ltd and its partners have grabbed a 27% stake in First Mutual Life (FML) as the battle for Zimbabwe’s second life assurer hots up ahead of the annual general meeting in June.
Renaissance and partners la
st year reportedly splashed over $500 billion on FML shares in a string of transactions that have been shrouded in secrecy which triggered speculation on the source of the funds. A giant South African insurance company has been linked to the purchase.
There are doubts about Renaissance’s financial muscle after it recently made a paltry $82 billion profit. Companies working with Renaissance in the deal include New Africa Nominees (Pvt) Ltd (7%), RIBC Ltd (3,98%) and Renaissance Securities Nominees (Pvt).
While on paper the shares belong to Renaissance and partners, sources said they could be fronting for a cash-rich company. Econet Wireless Zimbabwe is being mentioned as one of the possible financiers.
The mystery over the issue deepened amid revelations this week that Renaissance and Econet have separately written letters to FML demanding board representation.
Renaissance and Econet are demanding board seats on the basis of the 27% shareholding, raising questions as to whether they are working together. It is understood that Econet has openly claimed ownership of the shares and sent an emissary to FML to clarify the issue.
Econet CEO Douglas Mboweni led the team, a source said. FML was said to have told Mboweni to clarify which shares they owned. Efforts to get comment from Mboweni were unsuccessful as he was said to be in South Africa.
The insurance giant is expected to issue a statement in the next few weeks announcing the change in its shareholding structure.
FML spokesperson Ruth Ncube could not be reached for comment. Econet group spokesperson Sure Kamhunga could neither deny nor confirm the company’s investment in FML.
“FML, like Econet, is a public listed company, and as such their shares are publicly traded on the ZSE for anyone who has money to buy,” Kamhunga said. “Econet like all large companies with excess cash undertakes investments in equities and money markets to manage its portfolio from time to time.”
Renaissance CEO Patterson Timba was also said to be in South Africa. Renaissance two weeks ago announced it had acquired a significant stake in FML but did not give details. Meanwhile, Renaissance and partners are said to be in the market hunting for shares as they target to reach 31% threshold before June. Their plan is however being stalled by pension funds who control a large part of FML shares.
FML as the fund managers are understood to be resisting pressure to offload the shares, a move which would give Renaissance the targeted 31%.
Renaissance is said to be piling on pressure to buy the shares controlled by FML on behalf of pension funds, arguing that by clinging on to the shares FML was creating a concentration risk. They said if the FML shares collapsed the pension funds would become shells.