The Zimbabwe Reinsurance Corporation (Zimre), which dominates the reinsurance business in the country, although there are six other operators in the country, is coming on to the market although it will initially trade over the counter.
The company is offering 206.6 million shares, 49 percent of the government’s stake in the company, at $1.50 each. After the privatisation, the government will still retain 51 percent of the stake with individuals and institutions owning 24 percent, pension funds 10 percent, the insurance market another 10 percent and employees, five percent.
The government may dilute a further 20 percent with 31 percent presumably earmarked for a foreign technical partner. The privatisation also sees Zimre enter the open market.
Previously 20 percent of all written premiums had to be reinsured with the company but it says this is not likely to affect the company adversely as much of this was marginal business.
Zimre will become the fourth state-owned company to be privatised in the past two years.
The first to be privatised was Dairibord Zimbabwe which was followed by the Cotton Company and the Commercial Bank of Zimbabwe.
All three are listed on the Zimbabwe Stock Exchange.
CBZ has already engaged the Amalgamated Banks of South Africa and the International Finance Corporation as partners.
Dairibord Zimbabwe has expanded to Malawi where it now runs the biggest dairy in Blantyre.
The Zimre offer opened on February 8 and closed on February 26 with the allotment on March 1.