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

Chronicle (Zimbabwe) - - Business - Oliver Kazunga Se­nior Busi­ness Re­porter Harare Bureau

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

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