Zimre to raise $15m through rights offer

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ZIMBABWE’s largest reinsurer announced on Monday that it plans to raise US$15 million through a rights issue to strengthen its underwriting capacity. Zimre Holdings Limited (ZHL) said in a notice that the funds from the rights offer would be used to strengthen its reinsurance capital base.
The rights issue, which is subject to shareholder approval at an EGM to be held on January 28, will be underwritten by NMB Bank Limited is also expected to increase the company’s underwriting capacity.
“The additional capital to be raised through the rights offer will enhance liquidity and strengthen the reinsurance capital base and subsequently increase underwriting capacity, support business growth and position the company’s position the company’s reinsurance subsidiaries to compete effectively in the domestic and regional markets,” the group said.
The recapitalisation is also expected to strengthen ZHL’s international credit ratings for the insurance units.
The rights issue would see the group offering 750 million shares to existing shareholders at US$0.02 each.
ZHL last year indicated that it was is considering delisting from the Zimbabwe Stock Exchange (ZSE), in a major blow to the bourse that has had too few listings over the past few years. The company had realised no benefits from a ZSE listing, and had in fact lost significant value in terms of market capitalisation.