18 January 2018
   
Soldiers deployed all over rural Zim: MDC-T
MDC-T’s Mudzuri begs ZCTU for support
Moyo claims CIO spy killed during coup
Activist wants ED, Chiwenga at Hague
Priscilla: Erection at 45 like winning lottery
Outrage as top soldier threatens 2008 terror
ED era to yield 'good things', says Pari
Man grows dagga to cure heart, caged 18mths
MORE NEWS
Bond notes here to stay, says Chinamasa
South Koreans in $70m Zim agro-project
MORE BUSINESS
Hubby bashes Star FM anchor in love row
$18/yr subscr too much for musicians
MORE SHOWBIZ
Caps bid to rehire star forward Nhivi
Mourinho says 'relaxed' about Sanchez
MORE SPORTS
A view beyond the Zimbabwe coup
'Shit-hole': Just Take moral high ground
MORE OPINION
 
Economy: the need for a paradigm shift
Trump rage ignores truth: A response
MORE COLUMNISTS
 
 
Fidelity shareholders approve Langford purchase, ROI seen at 250pct
20/10/2015 00:00:00
by The Source
 
Shareholders endorse acquisition ... Simon Chapereka
 
RELATED STORIES

FIDELITY Life Assurance shareholders on Tuesday approved a resolution to acquire 81 percent of Langford Estate from agro-industrial group, CFI Holdings.

The acquisition is a land-for-debt swap deal which Fidelity says will increase its balance sheet over five-fold and become the cornerstone of its future growth.

The approval at an extraordinary general meeting means Fidelity will assume CFI’s $18 million debt on restructured terms after shareholders of the agro-industrial conglomerate approved the sale at its EGM held last Friday.

Fidelity plans to use Langford’s 834 hectares of undeveloped urban land located in Harare South to expand its Southview Park high density residential housing scheme.

“This project is going to generate a bottom line of more than $200 million which will strengthen our balance sheet. We should be able to underwrite and undertake more risk on the insurance side,” managing director Simon Chapereka told The Source.

“In terms of our balance sheet, it is moving immediately from $86 million to 108 million. By the time we finish the project, the balance sheet will be in the region of $500 million and on that we can underwrite even bigger insurance risks.”

CFI owes FBC Bank, Agribank, CBZ, the Infrastructure Development Bank of Zimbabwe, NMB and Standard Chartered a combined $18 million, which will be assumed by Fidelity under the terms of the deal.

Chapereka told shareholders at the EGM that Fidelity said it had already deposited $2 million with a local bank pending approval while the balance will be paid over seven years at 10 percent interest per annum on the balance after a two year grace period.

Langford will be Fidelity’s third residential property foray after Manresa Fidelity Life Park and Southview and Chapereka said the ventures were key to growing its insurance business.

“Our property investments are profitable, but we are not forgetting our core business, which is insurance but the developments give us the ability to match our long-term liabilities and assets. In any case, there are not so many viable investments outside of property,” said Chapereka.

“Manresa Fidelity Life Park was $7 million. In terms of Southview Park, by the time we finish that will be worth about a $100 million and Langford will be about $300 million.”



Advertisement

Manresa, a medium density project has 317 stands which were sold out except for 20 which the group retained for internal use.

At Southview, the group expects to complete servicing of 2,100 stands under the second phase of the project by November this year for a total of 5,300 stands. About 700 stands under the project remain unsold.

Langford will have 11,624 residential stands and will generate up to 250 percent return on investment.

“Langford was an opportunity we could not miss. The land was bought for $18 million, and we are going to add about $200 million to the bottom line from that,” said Chapereka.

In terms of the mix, Chapereka said the insurance business and property were at 50:50 but with the addition of Langford, it will become 40:60 with more value coming from property investments.

“It is worth noting that we have been able to undertake these projects because of the income from the insurance side of business,” said Chapereka.


 
Email this to a friend Printable Version Discuss This Story
Share this article:

Digg it

Del.icio.us

Reddit

Newsvine

Nowpublic

Stumbleupon

Face Book

Myspace

Fark

 
 
 
comments powered by Disqus
 
RSS NewsTicker