News Column

FBCH/Turnall Marriage Ends

August 29, 2014

Happiness Zengeni

FBC Holdings plans to distribute the group's combined shareholding in TurnalL Holdings by way of a dividend in specie, a transaction, which if approved will leave NSSA as the major shareholder in the listed roofing materials company.

FBC owns 58,32 percent of Turnall between the bank at 47,9 percent and 10,4 percent held by the holdings company.

Chief executive Mr John Mushayavanhu told analysts that FBC shareholders will receive 0,39 Turnall shares for every one share held in the group. The dividend comprises 287 536 313 ordinary shares.

The transaction will have to go through an extra-ordinary general meeting for approval from shareholders.

Mr Mushayavanhu said the EGM will be held sometime next month. If approved NSSA will emerge as the majority shareholder in the company. NSSA holds 35,1 percent in FBC while it has 13,1 percent in Turnall.

Mr Mushayavanhu called it one of the biggest dividend payouts on the Zimbabwe Stock Exchange.

He said FBC had disposed of its shareholding in Turnall due to stringent banking regulatory requirements of the RBZ.

FBC had to request on a regular basis permission from the RBZ to keep holding on to its investment in Turnall, a non core business.

He said after distributing the Turnall shares to shareholders as a dividend in specie, the manufacturing firm's shares could appreciate.

This is because the share is considered undervalued due to among other factors, perception that FBC had undue influence over the unit.

The decision to dispose the shareholding also came just after the group signed a $60 million syndicated loan facility.

"That investment was the only one in the group which does not operate in the financial services business sector and is therefore non-core.

"The distribution of the Turnall shares will result in FBCH retaining its identity as a purely financial services group."

FBC had kept the shares it acquired after a client defaulted on a loan, waiting for the share price to gain before disposing of the asset.

FBC reported a 17 percent decline in the bottom line to $6,8 million for the half year ended June 30 weighed down by losses in Turnall

Meanwhile, managing director Mr John Jere has left the group to pursue other interests following the expiry of his contract.

Mr Jere said that his departure was a mutual agreement after serving 15 years at the group. "I leave the group in good spirit after an exciting time at the helm of the company during which we strengthened its operations through diversification of products. I believe the company is on a good footing and poised to fully exploit available opportunities in its segment as one of the major players in the construction sector".

Mr Kenias Horonga the current financial director is now acting CEO.

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Source: AllAfrica

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