HARARE, August 29 (The Source) – Fidelity Life Assurance says it is in the process of restructuring its long term debt which has resulted in high finance costs that are weighing down the company’s balance sheet.
Last year the company’s borrowings doubled from $13,3 million to $26,7 million.
Fidelity assumed CFI Holding Limited’s bank loans amounting to $16 million last year when it acquired Langford Estates-a 834 hectares piece of undeveloped urban land located in Harare South- in a land-for-debt swap arrangement.
Fidelity plans to use Langford Estates to expand its Southview Park high density residential housing scheme.
“Financing costs arising from debts assumed in 2015 have also weighed down on the bottom line. We expect it to reverse once development of Langford Estates commences,” said chairman Fungai Ruwende at the company’s annual general meeting on Monday.
“The Company has been able to service its loan obligations which are tied to the specific land development projects. Various options are being pursued to restructure our long term debt in order to minimise any financial strain to the group”.
Ruwende said preliminary development for Langford estate is expected to commence in the last quarter and the servicing of Southview Park stands is expected to be completed by year end.
Last year Fidelity indicated that Langford will have 11,624 residential stands and will generate up to 250 percent return on investment.
Langford will be Fidelity’s third residential property foray after Manresa Fidelity Life Park and Southview.