ZIMRE Cautions Shareholders Amid Acquisition Of Fidelity’s Controlling Stake

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By Alois Vinga

DIVERSIFIED insurance group, ZIMRE Holdings Limited (ZHL) has cautioned shareholders following the acquisition of a controlling stake in Fidelity Life Assurance Company Limited (FLA).

The announcement follows an agreement reached to enter into a sale and purchase agreement, wherein the National Social Security Authority (NSSA) is offloading its interest in FLA to ZHL in exchange for the latter’s shares as part of their portfolio restructuring.

As such ZHL will emerge as the majority shareholder of FLA with a total shareholding of 55.66%.

In a joint statement this week FLA and ZHL urged shareholders to exercise caution when dealing with the former’s shares.

“Shareholders are advised that ZIMRE Holdings Limited (ZHL) has acquired a control block in Fidelity Life Assurance Company Limited (FLA) and the full impact thereof is being determined. In the meantime, shareholders are advised to exercise caution when dealing in the securities of both FLA and ZHL until a full announcement is made,” the statement said.

On completion of the deal, NSSA is set to dispose of its 35.09% stake in Fidelity Life Assurance to ZIMRE Holdings Limited.

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 is set to 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.

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 micro-lending, 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.