ZimRe to raise US$40m in subsidiary listing

Published: 3 hours ago

Diversified financial services group ZimRe Holdings Limited (ZHL) is set to raise between US$30 million and US$40 million through the listing of its subsidiary, EmeritusRe International, on the Botswana Stock Exchange (BSE) as part of efforts to strengthen its balance sheet and reclaim its position among Africa's leading reinsurers.

The planned capital raise follows the 2023 merger of ZHL's two Botswana-based reinsurance operations - Emeritus Reinsurance Botswana and Emeritus Reinsurance International - after regulatory changes allowed the combined entity to underwrite domestic business.

Speaking to NewsDay Business on the sidelines of the group's annual general meeting last week, ZHL chief executive officer Stanley Kudenga said the listing process had already begun, with financial advisers appointed to guide the transaction.

"We're looking at raising between US$30 million and US$40 million. Hopefully, in terms of milestones, much of the work will be done by the end of the year," Kudenga said. "By the end of the first quarter of next year, we expect to have a clear direction."

Kudenga noted that a robust balance sheet, strong underwriting capacity, and favourable international ratings were critical to the success of a reinsurance business. However, he said Zimbabwe's challenging economic environment had eroded local players' capital strength compared to their regional counterparts.

"Some of the insurers we want to reinsure in the region have stronger balance sheets than us," he said. "To be a significant player again, we must have the balance sheet, and raising capital in Botswana - where the country rating is higher - will help us achieve that."

Kudenga added that Botswana's policy certainty gave ZHL confidence in the stability of its planned expansion.

The ZHL boss also revealed that the group is pursuing balance sheet optimisation to enhance shareholder returns, as its asset structure has become heavily weighted towards property investments.

As of the end of 2023, ZHL's total assets stood at US$208,07 million, up from US$182,04 million a year earlier, with property holdings accounting for US$87,02 million - a 16% increase from the prior year.

"Property rentals have limited yields - generally no more than 10% to 15%. To deliver stronger returns, we must leverage these assets more effectively," Kudenga said.

By March 2025, ZHL's total assets had grown by 7% year-on-year to US$223,04 million, largely driven by net cash generated from operations.

If the Botswana listing is successful, ZHL expects the capital injection to not only bolster its reinsurance business but also unlock new investment opportunities across Africa.
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