First Mutual Holdings (FML) is set to acquire Zimbabwe’s largest short term insurer, NicozDiamond, after getting regulatory approval, the company said on Wednesday.
State-controlled pensions manager National Social Security Authority (NSSA) has transferred to FML its holdings of 300,263,184 NicozDiamond shares constituting 50,89 percent of the entire issued shares of NicozDiamond. In exchange, FML has issued and allotted 59,813,383 FML shares to NSSA.
As a result, NicozDiamond will become a subsidiary of FML. FML has indicated that it will consider delisting the insurer once the transaction is complete.
FML will command an 80,92 percent controlling stake in NicozDiamond upon completion of the transaction.
In August FML shareholders approved a $17,25 million rights issue at an extraordinary general meeting (EGM) held in August to raise the amount needed to acquire NicozDiamond , subject to regulatory approvals.
“Shareholders are advised that First Mutual Holdings Limited has received regulatory approval for the acquisition of the entire issued share capital of NicozDiamond insurance Limited,” FML said in a statement.
NSSA is still in the process of procuring an additional 177,161,256 NicozDiamond shares from a third party to complete the transaction, constituting 30,03 percent of the entire issued shares of NicozDiamond, FML said.
“Subject to shareholder and regulatory approvals, NSSA has irrevocably undertaken to acquire and sell these shares to FML in terms of the circular to FML shareholders issued on 10 August 2017. FML shall issue and allot 35,291,087 FML shares in consideration for this stake,” FML said.
The 30,03 percent which NSSA irrevocably undertook to acquire and sell to FML is currently held by Zimre which recently said it no longer has intentions to sell off its shares.
NSSA, which is pushing the transaction aims to consolidate its insurance portfolio. Its stake in FML will increase to 60,71 percent upon the completion of the transaction.
Following the purchase of shares from NSSA, 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.
Subject to regulatory approvals from the Insurance and Pensions Commission (IPEC) and Competitions and Tariff commision, NicozDiamond will be merged with FML’s Tristar insurance company.
“As previously communicated, the operations of NicozDiamond and Tristar Insurance Company Limited will be merged through the acquisition of Tristar by Nicozdiamond or through any other appropriate mechanism,” FML added. – The Source.