First Mutual to exit RTG … as Nicoz Diamond Deal faces collapse

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First Mutual Park

First Mutual Holdings Limited have announced that following negotiations between FML and NSSA (a major shareholder in FML) an agreement has been reached between FML and NSSA pursuant to which NSSA will acquire FMHL’s entire shareholding in Rainbow Tourism Group (RTG), subject to certain terms and conditions.

The agreement to dispose of 19.957% shareholding in RTG was reached in August 2017 and subsequent approvals were obtained. The disposal is in terms of the corrective order
issued by IPEC in 2012 and this investment in RTG has been classified as held for sale by FMHL since December 2015.

Mean while unconfirmed reports indicate that the merger between Nicoz Diamond Insurance Limited (NDL) and Tristar (a subsidiary of First Mutual Holdings) is under threat after a major shareholder in the largest short-term insurer in the country, Nicoz Diamond, (allegedly) indicated that they would no longer sale their shares.

RELATED: First Mutual Holdings passes resolution to acquire Nicoz Diamond

Reports from one of the major financial newspapers in the country – The Financial Gazette – indicate that Zimre Holdings Limited (ZHL) in a meeting held last week had resolved to maintain their 30 percent interest in Nicoz Diamond.

ZHL’s stake would make FMHL the major shareholder in Nicoz. FMHL was trying to acquire 30 percent of ZHL shares through a swap deal that would see FMHL having 80,92 percent shareholding in Nicoz.

FMHL was planning to acquire these shares under a share swap deal in which Nicoz Diamond shareholders were to receive one FMHL share for every 5,02 Nicoz Diamond shares held.

Just last month ago FMHL shareholders had passed a resolution to acquire Nicoz Diamond and merge the short term business of Nicoz Diamond and a subsidiary of FMHL, Tristar Insurance.

RELATED: Job cuts loom in First Mutual and Nicoz Diamond merger plan

The decision by ZHL not to sale their stake in Nicoz comes hard on the heels of a High Court ruling that nullified transactions made by three former Renaissance Financial Holdings Limited (RFHL) directors who facilitated the possession of FMHL by the National Social Security Authority (NSSA), NSSA Holds the majority shares in both Nicoz Diamond and First Mutual Holdings.

The judgement could also effectively scupper the planned acquisition of NicozDiamond by FMHL – Multiple Sources.

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