FBC Holdings Ltd (FBCH), which was formed after the merger of the Southern Africa Reinsurance Company (Sare) and First Banking Corporation, was yesterday listed on the Zimbabwe Stock Exchange (
ZSE). FBCH chairman Herbert Nkala said he was excited about the listing as it meant the group would increase its capacity to underwrite more business, effectively increasing its market share in the stable’s reinsurance market. FBCH yesterday traded at $49,50 and a total of three million shares changed hands.
The deal becomes the second merger within the banking sector after the Century Holdings/CFX Financial Services merger was approved last month by the Reserve Bank of Zimbabwe (RBZ).
The top five FBCH shareholders after the transaction became effective yesterday are Zimre Holdings with 18,35%, Segmented Investments (Pvt) Ltd 13,67%, National Social Security Authority 12,32%, Local Authorities Pension Fund 8,71% and Kingdom Nominees 6,46%.
Financial powerhouse Kingdom was a surprise inclusion on the new FBCH stable as it also runs and operates a commercial bank.
Major business enterprises where business mogul Mutumwa Mawere is understood to have an interest such as Zimre, NicozDiamond and Fidelity Life Assurance Nominees are also included in the new deal.
Mawere is now based in South Africa after fleeing the country on allegations of externalising foreign currency.
Stock market analysts said the FBCH share price was likely to gain when its pending deal with the National Discount House (NDH) was concluded.
They said this was the beginning of more mergers within the financial sector.
According to the proposed restructuring of First Bank which would be effective through the swap by FBCH of the entire issued ordinary share capital of First Bank in exchange for the issue to First Bank shareholders of ordinary shares in FBCH, which on implementation, would result in First Bank becoming a wholly-owned subsidiary of FBCH. The proposed restructuring would result in the de-listing of First Bank from the ZSE. The issued share capital of First Bank was more than $271 million.
The FBCH deal had initially raised eyebrows within the business fraternity as to its genuineness because they felt this was another disguised takeover by the ruling Zanu PF of customer funds.
They questioned Sa-re’s shareholding which, among its stable includes government-influenced entities such as NSSA, LAPF, PTC Pension Fund, Jewel Bank and Zesa Staff Pension Fund.
Nkala said FBCH was still interested in NDH.
He said the reason why they had excluded the discount company in the merger was mainly because of delays in its evaluation.
“We reached a stage where we felt the unlisted entity would have delayed the whole transaction, as there are some evaluation issues to be resolved. In essence and for the record we have not ruled out the unlisted entity,” Nkala said.