Old Mutual embarks on managed separation exercise . . . to list empowerment shares

OLD Mutual group plc will soon embark on a managed separation exercise that will see the group being split into four clusters.

Managed separation entails that the business units will become stand alone operations with no group head office to rely on.

Old Mutual Zimbabwe Limited (OMZL), a strategic business unit for the group, revealed this in a reviewed financial statement for the six months ended June 30, 2016.

It said the outcome and implications of the managed separation exercise would be advised by Old Mutual plc.

“OMZL has been advised by its ultimate parent company, Old Mutual plc that the Old Mutual group is embarking on a managed separation exercise under which the Old Mutual plc group will be split into four clusters, namely Old Mutual Wealth, Old Mutual Asset Management, DEDBANK and Old Mutual Emerging Markets.’’

At present, OMZL falls under the Old Mutual Emerging Markets cluster.

It is believed that the separation of parent group Old Mutual plc will result in specialised focus on expansion Old Mutual Emerging Markets (OMEM).

OMZL chief executive officer Mr Jonas Mushosho is on record as saying the managed separation will not negatively impact Old Mutual Zimbabwe or OMEM.

He has indicated that the separation exercise will offer a significant opportunity for them in the sense that the OMEM to which his organisation belongs will be listed as a separate business.

During the period under review, OMZL recorded a profit before tax amounting to $15,9 million comparted to $14,6 million.

Old Mutual plc was splitting itself following a strategic exercise that was carried out that showed that the group faced significant share price discounts due to a conglomerate discount and increased regulatory IN an endorsement of Government’s indigenisation programme, Old Mutual Zimbabwe will become the first company to trade its empowerment shares on the Financial Securities (FINSEC) Alternative Trading Platform.

The integrated financial services company, will tomorrow list its shares on the empowerment segment of the newly licensed ATP.

“In pursuit of the company’s approved indigenisation implementation plan, a total of 83 011 718 issued and fully paid B Class shares in the capital of the company have been set aside for allocation or have been allocated to the approved shareholders,” Old Mutual Zimbabwe Limited said in an abridged statement.

The shares have a nominal value of $0,0000032 per share. The indigenisation plan, approved by the then Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere was concluded in November 2011 and resulted in 10 percent of Old Mutual Zimbabwe being awarded to qualifying staff (comprised of 7 percent to staff share schemes while 3 percent went to the staff pension fund).

Pensioners benefitted from an equivalent of 9 percent of the company (8 percent to client pensioners and 1 percent to retired staff pensioners), while the company’s strategic partners and the Youth Fund have been allocated 3,5 percent and up to 2,5 percent respectively.

According to President Mugabe, Government introduced the Indigenisation and Economic Empowerment Policy to deliberately empower historically disadvantaged indigenous Zimbabweans and to grant them ownership and control of the

costs. Among others, this was because regulators across country’s means and factors of production.

The policy, the President said, was designed to enable indigenous people to be significant players in the mainstream of the country’s economy.

OMZL said since it issued the B Class shares, trading of the shares had been conducted exclusively through Old Mutual Securities on an over the counter trading platform; which is essentially a dealers’ network.

However, the gazetting of the securities alternative trading platform rules this year presented OMZL with an opportunity to list the B Class shares on the ATP, which is operated by FINSEC; a securities exchange licensed by the Securities and Exchange Commission of Zimbabwe.

The listing will be by introduction; which is a process through which already issued and fully paid shares are listed and do not require any marketing. OMZIL said the rationale behind the listing of the shares on the ATP included the need for broader market participation in the capital of company and enhanced liquidity, compared to the OTT trading platform scenario.

Since its incorporation in June 1998, the entire share capital of OMZL had been beneficially but directly held by Old Mutual Plc, a multi-listed financial group with its primary listing in London.

Further, OMZL said listing the shares on the ATP will allow a market determined price discovery mechanism in the trading of the OMZL B Class shares as well as increase visibility of the OMZL brand in the market. OMZL is Zimbabwe’s largest financial services company and property holding group with its operations spanning sectors such as insurance, banking, asset management, property, stock broking and custodial services.

the globe were no longer in favour of huge financial conglomerates. — @okazunga