Business / Companies
Econet to divorce EcoLife
05 Oct 2011 at 23:55hrs | Views
The Herald reports that Econet Wireless Zimbabwe is contemplating turning over its mobile phone-based life assurance product, EcoLife, to First Mutual Limited.
That decision was taken after the company resolved to sell its shareholding in Afre Corporation, a partner in the insurance project.
Econet said it would assess the capacity of FML to underwrite the scheme when it decides to cut all ties with EcoLife following the controversy sparked by its involvement in Afre.
Econet has already indicated it would sell its 19,71 percent stake in Afre to the National Social Security Authority, which it believes has enough financial resources to stabilise the life assurance group.
Chairman Mr Tawanda Nyambirai said Econet would definitely sever ties with EcoLife if it was established beyond doubt that FML had adequate resources and technical capacity to underwrite the free life assurance scheme.
"It is vital for us to assess FML's capacity to service our subscribers to determine whether there is stability and financial muscle in the balance sheet to underwrite life assurance risk, If there is, then we will exit," said Mr Nyambirai.
Econet decided to quit Afre after regulatory authorities caused the postponement of the combined annual general meeting and the extraordinary general meeting meant to discuss, in the main, the recapitalisation of Afre.
This would have seen shareholders approve a US$15 million rights offer to recapitalise Afre subsidiaries.
But the regulators said they needed to complete their probe to establish the extent of the problems that rocked the Afre group.
The group's subsidiaries required fresh capital after exposure suffered due to irregular inter-party transactions, allegedly perpetrated by Renaissance Financial Holdings Limited though the major shareholder, Mr Patterson Timba.
Econet, which this year divested from Rainbow Tourism Group following scathing shareholder disputes, said it was leaving Afre after its intentions to bring stability at the diversified life assurance group were wrongly construed.
Under EcoLife, registered subscribers received free life cover commensurate with the amount of airtime used in a month and to claim benefits clients needed to have consistently used a given amount of airtime for six months.
That decision was taken after the company resolved to sell its shareholding in Afre Corporation, a partner in the insurance project.
Econet said it would assess the capacity of FML to underwrite the scheme when it decides to cut all ties with EcoLife following the controversy sparked by its involvement in Afre.
Econet has already indicated it would sell its 19,71 percent stake in Afre to the National Social Security Authority, which it believes has enough financial resources to stabilise the life assurance group.
Chairman Mr Tawanda Nyambirai said Econet would definitely sever ties with EcoLife if it was established beyond doubt that FML had adequate resources and technical capacity to underwrite the free life assurance scheme.
"It is vital for us to assess FML's capacity to service our subscribers to determine whether there is stability and financial muscle in the balance sheet to underwrite life assurance risk, If there is, then we will exit," said Mr Nyambirai.
This would have seen shareholders approve a US$15 million rights offer to recapitalise Afre subsidiaries.
But the regulators said they needed to complete their probe to establish the extent of the problems that rocked the Afre group.
The group's subsidiaries required fresh capital after exposure suffered due to irregular inter-party transactions, allegedly perpetrated by Renaissance Financial Holdings Limited though the major shareholder, Mr Patterson Timba.
Econet, which this year divested from Rainbow Tourism Group following scathing shareholder disputes, said it was leaving Afre after its intentions to bring stability at the diversified life assurance group were wrongly construed.
Under EcoLife, registered subscribers received free life cover commensurate with the amount of airtime used in a month and to claim benefits clients needed to have consistently used a given amount of airtime for six months.
Source - zimpapers
