Fidelity to end Langford Estates dispute

11 Jul, 2023 - 00:07 0 Views
Fidelity to end Langford Estates dispute Fidelity Life Assurance

eBusiness Weekly

Business Writer

Fidelity Life Assurance (FLA) says is in talks to end the dispute over Langford Estates dispute that started in 2015.

The parties have realised no one is benefiting from the prolonged dispute over the control of the property.

CFI Holdings has challenged the Langford Estates transaction after one of the shareholders opposed the deal.

The transaction, which was consummated in 2015, involved a land-for-debt swap deal that saw Fidelity Life Assurance (FLA) assume CFI’s $18 million debt in the form of $16 million in bank debts and settle $2 million with other creditors.

However, CFI’s majority shareholder demanded the reversal of the transaction.

Fidelity intended to develop about 11 500 high-density residential stands at Langford with an estimated market value of $350 million, which was to be the successor to the South View Housing project.

Reginald Chihota, Fidelity’s managing director, said apart from efforts to resolve the Langford residential stands issue, the company is making significant investments in prime areas like Victoria Falls as well as onboarding land banks nationwide.

“The Langford issue will sooner rather than later be resolved, as all parties and stakeholders believe that the longer it drags, no one is benefiting,” he said in an interview.

Chihota said the company will be supporting its best-selling product, Vaka Yako, which will enable the company to invest more in the residential stand development.

Vaka Yako, a unit-linked investment product, is designed to assist customers in building up savings towards individual home ownership at an affordable cost.

The product is designed to help individuals grow their funds in a structured savings model that guarantees individual homeownership as the end product.

The scheme is an individual life insurance investment plan that permits individuals to purchase a stand from a pool of stands anywhere around the country for between US$44 and US$400 per month.

“The company is also creating space for Zimbabweans in the diaspora to participate in the Vaka Yako product.

“They are more liquid in terms of USD, and they can provide money for the development of the land banks,” he said.

Chihota said due to the inflationary environment, the group increased US dollar business while at the same time developing products for the informal market, which is primarily dollarised.

The group is a holding company providing products and services for life assurance, employee benefits, asset management, medical insurance, funeral assurance, actuarial services, and residential property development.

This includes managing pensions, funeral insurance, and microfinance in the informal banking market.

“We are doing it specifically in three ways. We are increasing USD business and targeting mass USD business because the USD is not really hyperinflationary,” he said.

Chihota said the company is increasingly following where the money is, which coincides with the thrust, which includes increasing financial inclusion by embracing the informal sector.

“When you develop products for that market, it’s primarily a dollarized economy, and this will ensure increased USD revenues,” he said.

Chihota said that on business, which is not in USD terms, and to protect the policyholders, it invests in real assets within the confines of guidelines on investment.

“You park that money in real estate, and when picking stocks on the equities market, we want those that go a long way in preserving value.

“Some of the counters have migrated to the Victoria Falls Stock Exchange (VFEX), which trades exclusively in USD, which then protects our business,” he said.

In the Zimbabwe dollar book, Chihota said the company is also preserving value through inflation-adjusted premium reviews so that the benefits also remain relevant.

However, for group revenue for the period from January to April 2023, Chihota said the operating environment continues to be dynamic and fluid; hence, the group will ensure to adjust products and target appropriate market segments.

He told shareholders at an annual general meeting that the business looks forward to rising to the challenges and ensuring it remains relevant.

Group revenue for the period grew 481 percent compared to the same period last year, driven mainly by increases in net premiums received and investment income.


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