via ZB gets nod to float $10m agro bills October 23, 2014
ZB Financial Holdings has been given the nod to raise $10 million to finance the agricultural sector.
The money would be raised through agro bills.
Group chief executive officer Ron Mutandagayi said the group was in the market talking to potential investors.
“We have got the approval of the $10 million agro bill. The approvals are from the Insurance Pensions Commission and the Ministry of Finance. We are now in the market talking to the investors to subscribe for the bills,” he said.
The bills have a tenure of two years.
The coupon (interest) rate is 10% payable annually.
Between 2010 and 2012, the company raised $11,3 million through agro bills, but the uptake had been slow in some instances. Last year, the group raised $5 million in agro bills.
The agricultural sector has been struggling to secure funding in the past six years due to various challenges that included the absence of collateral as banks were not accepting 99 year leases.
Government has been failing to fund the agricultural sector as it has no fiscal space to do so. Over 70% of the revenue collected by government is consumed by salaries leaving little to fund agriculture.
In June, the Agricultural Marketing Authority floated $55 million bills to raise money to fund the purchase of close to 250 000 metric tonnes of grain for the 2013-2014 marketing season. The bills have a tenure of 360 days and an interest rate of 10,5% per annum.
Mutandagayi told NewsDay last year that the group was failing to access international funding as it was still under the Office of Foreign Assets Control (Ofac) list.
He also said the group was finalising the retrenchment process as they have completed the first phase of the voluntary retrenchment exercise.
“We are now moving to the compulsory one and we have to negotiate with the Ministry of Labour. We do not have the figure on how much we will spend on retrenchment as it is a matter of negotiating with the ministry,” he said.
The company has 1 200 employees and it was targeting to retain 900 employees after the retrenchment process. The group has 66 branches, but five were not making profit.
During the six months ended June 2014, the life assurance operations contributed 11% and the reinsurance operations contributed 9% to the net out-turn, after recognising an impairment charge of $392 700 on premium debtors at the reinsurance business.
For the six months period under review the group posted a loss of $2,6 million compared to a profit of $2,2 million the same period last year. Total income for the group went down 22% to $26,8 million compared to $34,5 million during the same period last year while net interest income was down 10% to $9,5 million from $10,6 million during the same period last year.
Operating expenses stood at $28,9 million from $29,3 million in the prior year.
Assets for the group were up 4% to $344 million and deposits were up 6% to $231 million during the six-month period.
“Fees, commission-based charges and other income, at $17,3 million reduced by 7% from the comparative period. The reduction is a result of limited off-take on credit creation commissions as a result of the deliberate suppression of lending activities in preference of higher quality assets,” the group said.
COMMENTS
Seems like gonos agro cheques are returning to pay zpf cevil servarse wages !!!!!!!!!!
Very descriptive article, I loved that bit. Will there be a part
2?