Zimre Holdings Limited (ZHL) has called off plans to sell off its shareholding in insurance firms in NicozDiamond and Fidelity Life Assurance, citing increased uncertainty in Zimbabwe’s financial system.
An official close to the deal said that the group had opted to keep its shares in the two insurance firms as opposed to holding onto Real Time Gross Settlement Systems (RTGS) balances which are seen as high risk.
“The decision mainly has to do with the market developments. It is rather prudent to hold on to the shares at the moment rather than hold RTGS funds,” said the official.
Zimre Holdings has a 30.03 percent stake in Nicoz Diamond and a 20.57 percent stake in Fidelity.
Zimre was likely selling off the NicozDiamond stake to state-controlled pension fund, National Social Security Authority, one of its shareholders, with a 13.32 percent stake as at December 31, 2015.
In August, NSSA made an irrevocable undertaking to procure and deliver to First Mutual Holdings an additional 177 161 256 NicozDiamond shares or 30.03 percent shareholding, in exchange for 35 292 087 new FMHL shares as part of efforts to consolidate its insurance portfolio.
The company issued a statement on Wednesday, announcing the withdrawal of an earlier cautionary statement on the disposal of unspecified assets.
“The Board of directors of ZimRe Holdings Limited (ZHL) wishes to advise shareholders and the investing public that negotiations over the disposal of certain assets held by the company referred to in the cautionary statement first published on the 16th August 2017, have been curtailed by the ongoing market developments,” reads the statement.
“The board has mutually terminated the negotiations with the parties involved. The company will consider other funding alternatives, to pursue its strategic opportunities.” – The Source