By Alois Vinga
THE NATIONAL Social Security Authority (NSSA) is set to dispose of its 35.09% stake in Fidelity Life Assurance (FLA) to Zimre Holdings Limited (ZHL).
A recent circular confirms Zimre has entered into an agreement with NSSA for the purchase of its 35.09% stake in Fidelity.
ZHL already holds 20.57% of the life insurer’s stake and the acquisition will see it become the majority shareholder in the company with a cut of 55.66%.
“The acquisition will be done through a share swap agreement where NSSA will be issued with 65,14 million authorised but unissued ZHL shares on the basis of one ZHL ordinary share for every 0.59 FLA shares held by NSSA. The FLA acquisition shares constitute 4.25% of the ZHL total issued ordinary shares,” said ZHL in a statement.
Fidelity operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance, and Fidelity Funeral Services.
It also has several other subsidiaries involved in the provision of microlending, medical aid, asset management, actuarial services, and property development.
The company has been struggling to capitalise its operations as it reels under the strain of huge operating costs.
ZHL is also seeking to acquire the entire shareholding in Zimre Property Investments (ZPI) under a two-pronged approach. Zimre currently holds 64.3% of the group from 47.6% in 2016.
The two-phased approach will entail the acquisition of the remaining shares held by minority shareholders through an open market offer and the simultaneous application for the delisting of ZPI from the Zimbabwe Stock Exchange (ZSE).
The delisting of ZPI will ease the restructuring of the business composition, enabling a leaner and more focused business structure. These transactions seek to achieve total control of FLA and ZPI thus enhancing the group’s ability to create and preserve value for all its stakeholders.
The acquisitions will result in Zimre having combined assets of US$2.07 billion and shareholders’ equity of US$837 million. This will increase its underwriting capacity and ultimately competitiveness both in Zimbabwe and the region.