CFI Holdings EGM to seal fate for Fidelity Life’s Langford Estates transaction
Insurance24
HARARE, Insurer, Fidelity Life Assurance may lose the Langford Estate, a land comprising of 834 hectares, if Willoughby’s Investments, a substantial shareholder in CFI Holdings succeed in reversing the transaction at an extra-ordinary general meeting to be held next month.
The transaction which was consummated in 2015 involved a land for debt swap deal which saw FLA assuming CFI’s $18 million debt in the form of $16 million bank debts and settlement of $2 million to other creditors.
Fidelity believed that the acquisition of 81% of CFI Holdings’ Langford Estate would strengthen the insurance and property developer’s balance sheet giving it capacity to underwrite more business. In addition to that, the project was to have more than $200 million profit before tax.
However, as a result of ongoing shareholder disputes at CFI, Willoughby’s Investments together with other shareholders supporting the reversal of the transaction currently control over 40% shares in CFI Holdings.
Therefore, they requested an EGM to reconsider the resolutions that approved the transaction in 2015. Thus, in the event that the resolutions are not passed, as a further Special Resolution, Directors will be given authority to take action to cancel the disposal of an 81% share of Langford Estates to
Fidelity Life and recover costs and damages from the legal advisors and other professional parties that sponsored and advises on the illegal transaction and to recover all fees paid to such parties.
Subsequent to the EGM, CFI will own 100% of Langford Estates. According to Fidelity, and additional insurance income from the project of $8,7 million was also to be realised.
Langford Estates comprises of 834 hectares and is expected to yield 11 264 residential stands.
Fidelity had since begun the necessary processes to commence construction of about 11 500 high density residential stands at Langford with an estimated market value of $350 mln.
The project was expected to yield at least 11 264 residential stands, and being a successor to the South View Housing project.
