Insurer First Mutual Holdings exits RTG

Insurer First Mutual Holdings exits RTG

Insurance24 Reporter

HARARE, First Mutual Holdings Limited has reached an agreement with the National Social Security Authority (NSSA for disposal of 19.957% shareholding in hotelier Rainbow Tourism Group (RTG) to NSSA.

NSSA is already a major shareholder in FMHL and the deal reached in August 2016.

“FMHL is advising its shareholders that an agreement has been reached between FMHL and NSSA pursuant to which NSSA will acquire FMHL’s entire shareholding to RTG, subject to certain terms and conditions. The agreement to dispose of 19.957% shareholding in RTG was reached in August 2017 and subsequent approvals were obtained,” the company said in an announcement to shareholders.

The disposal, according to FMHL is in terms of the Corrective Order issued by IPEC in 2012 and this investment in RTG has been classified as held for sale by FMHL since December 2015.

“Shareholders and the investing public are therefore advised to exercise caution when trading in RTG and when dealing in FMHL shares.”

According to RTG’s half year results published, the hotel group sees sustained profitability into the future.

on stability stemming from cost cutting initiatives over the past five years and a soon to be implemented balance sheet restructuring.

An extraordinary general meeting, expected to be held by year-end, and will seal the fate and manner of restructuring, but management is fixated on expunging all interest bearing debt.

During the period, RTG posted a loss after tax of $300 000, 90% down from a $2,9 million in the first half of the year on account of cost cutting.

The company reported a 2 percent increase in revenues to $11, 6 million attributed to strong performance across all hotels except for its two Harare hotels, Rainbow Towers and Ambassador Hotel, which averaged a 13 percent slump in revenues due to social media attacks.

Meanwhile, FMHL is in the process of acquiring short term insurer Nicoz Diamond in a transaction which also involves NSSA.