First Mutual Holdings Limited’s shareholders voted to approve a $17.25 million rights issue which will finance the acquisition of an 80.92 percent stake in Zimbabwe’s largest short-term insurer NicozDiamond, at an Extraordinary General Meeting (EGM) yesterday.
They also voted to merge FML’s wholly owned subsidiary, Tristar Insurance, with NicozDiamond, subject to regulatory approvals.
FML intends to acquire the 80.92 percent stake in NicozDiamond from the state-run pension fund, National Social Security Authority (NSSA), in exchange for one FML share for every 5.02 NicozDiamond shares already held.
NSSA which is the majority shareholder in both FMHL (50.95 percent) and NicozDiamond (50.89 percent) is pushing the transaction in an endeavour to consolidate its investments portfolio.
NSSA is the country’s biggest institutional investor with interests spanning across various sectors and upon completion of the transaction NSSA will have increased its stake in FML to 60.71 percent.
FML chief executive, Douglas Hoto said that the company would be seeking regulatory approvals from the Insurance and Pensions Commission (IPEC) as well as the Competition and Tariffs commission.
“At the moment we are more focused on getting the approvals and on the business side we are looking at the process of integrating the two companies and doing the necessary changes in management,” he said.
“The rebranding if it comes, it will be in the second phase of the programme, but it’s likely that in future we might do that.”
If the acquisition goes ahead FML will be required to make a mandatory offer to the remaining 19.08 percent NicozDiamond shareholders in line with Zimbabwe Stock Exchange (ZSE) listing requirements. – The Source