TA HOLDINGS’ negotiations for a controlling stake in a local bank collapsed after the two failed to agree on an “economic” price.
TA Holdings said the negotiations collapsed because the requirements by the bank were “uneconomic” and could derail the company’s other priorities this year.
“TA Holdings maintains an acquisitive business model focused on profit, cash generation and sustainability with our primary focus remaining on opportunities that complement current strategic investments within insurance, the hospitality sector and the agro-chemicals industry,” said TA Holdings in a statement announcing its financial results for the year ending December 2008.
“We had previously indicated that we were at an advanced stage in the negotiations for a controlling stake in a local bank and we regret that the compliance requirements insisted upon by the relevant authorities rendered our interest uneconomic and negotiations ceased,” the company said.
Following the collapse of the deal, TA Holdings said its major priorities this year are now a US$7 million refurbishment of Cresta Hotel in Zimbabwe and to refurbish Sable Chemicals with a projected 2009 budget of US$8 million.
The company also intends to restructure Grand Re to effect external treaty opportunities, maximise the balance sheet strength at its local insurance company and to open Cresta Hotels South Africa (CHH) in Cresta Allen in Nigeria.
“The group is currently in negotiations relating to two major investment initiatives, a regional insurance business and a substantive stake in a listed company in Zimbabwe. Appropriate communications will be published in compliance with the Zimbabwe Stock Exchange regulations as soon as negotiations are completed,” TA Holdings said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
The group’s local investment achieved an operating profit of US$381 000, up from the US$112 000 achieved during the same period in 2007.
“This was driven mainly by the improved performance at Cresta Hotels and underwriting at the insurance companies,” said the company.
The hotel business was given authority to charge in foreign currency in November last year. This had the impact of improving the quality of revenues received, thus enabling the business to source supplies at competitive rates. A US$7 million refurbishment programme has been initiated for completion by the middle of 2010.
“The operating profit increased from US$869 000 in 2007 to US$4,1 million achieved during the current year as a result of an exceptional underwriting profit at Botswana Insurance Company (BIC) underlined the potential of this investment,” TA Holdings said.
The company achieved an underwriting profit of US$4 million against US$750 000 in the prior year. This was on the back of improved re-insurance treaties, effective cost control and excellent underwriting pricing.
During the period under review, on local investments shareholder equity increased from US$10,3 million to US$11,5 million mainly as a result of the drop in the value of financial assets following the losses recorded on the fair value of equities.
Financial assets decreased from US$5,3 million 2007 to US$651 000 last year, largely as a result of the drop in the values of financial assets following the losses recorded on their fair value of equities.
The company’s foreign investments saw its equity dropping from US$17,9 million to US$16,2 million.
BY PAUL NYAKAZEYA
