The Herald (Harare)
21 October 2009
Harare — TRUST Securities, a subsidiary of Trust Holdings Limited, in which THL has 20 percent shareholding was last week suspended by the Malawi Stock Exchange for being under-capitalised.
The Zimbabwean investment concern resolved to disinvest from Trust Securities reducing its shareholding to 20 percent after failing to raise funds to capitalise the unit, whose profitability has also been undermined by the global financial crisis.
THL told shareholders recently that operations in Malawi proved difficult to sustain following an operating loss of US$131 000.
"Resulting mainly from low activity on the Malawi Stock Exchange, the group has reduced its shareholding to 20 percent with effect from August 2009," Trust said.
THL operates Trust Securities and Trust Finance Limited in Malawi. The two subsidiaries are controlled by Unit Administration Limited, THL's biggest creditor, which holds 45 percent of Trust Securities and 60 percent of Trust Finance Limited.
Trust was forced to shed its shareholding after it failed to raise funds to recapitalise the two subsidiaries.
The failed business in Malawi could signal the exit of the concern from being a banking corporation to a diversified horticultural and investment concern following its wide interest in export agriculture, equities and real estate.
THL sold Trust Finance Limited (Trustfin) to TN Financial Holdings in 2007.
In the first half of the year, THL indicated that the strategic focus for the year was to ensure capital and profit growth for Trust Export Agriculture.
The group said a major acquisition was likely to be concluded as well as unlocking value under the real estate portfolio.
Meanwhile, Trust is negotiating with relevant parties towards an amicable solution to the Trust Bank and recapitalisation of loss-making Malawi operations seems not to be in their immediate plans.
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