Conrad Mwanawashe Business Reporter
ZIMRE Holdings subsidiary, Baobab Reinsurance is retrenching about 50 percent of its staff compliment as the reinsurance business takes a knock from the harsh economic environment.
ZHL chief operating officer Mr Solomon Tembo said it was the most prudent approach in the current environment.
“In the current macroeconomic environment it will be amiss not to review one’s cost structures,” said Mr Tembo.
He said the rationalisation of staff relates to the reinsurance operations in Zimbabwe only “where the operating environment is challenging”.
The group planned to strengthen existing reinsurance operations through recapitalisation, international rating and building critical skills.
In the half year to June results the group said that it was targeting to consolidate the reinsurance as core business.
The release of half the staff is a way to contain the cost structure.
Sweating and leveraging all assets in order to unlock and create value is also planned.
The company also plan to restructure investment portfolio through disposal of peripheral, non-core and non performing investments, in order to introduce liquidity in the core reinsurance operations.
The reinsurance will sell off non-core assets to raise about $7 million to shore up its liquidity situation. It is envisaged that a further $10 million will be raised through borrowings.
In the half year to June the reinsurance division contributed $17,46 million in GPW in the six months to June compared to $19,77 million in the same period last year and an operating loss of $1,54 million compared to an operating profit of $0,31 million achieved in 2013.
ZHL recorded a loss after tax of $0,11 million in the six months to June compared to a profit of $2,39 million in the same period last year.