FMHL targets NicozDiamond minorities

HARARE - Zimbabwe Stock Exchange- listed financial services group, First Mutual Holdings Limited (FMHL), has launched a bid to buy all outstanding shares held by minority shareholders in NicozDiamond Insurance Limited.

FMHL last year acquired 80,92 percent of  NicozDiamond issued shares and now seeks to buy the remaining 19,08 percent shareholding held by the minority.

NicozDiamond general manager for corporate services Gloria Zvaravanhu yesterday said the acquisition will be carried out through a scheme of arrangement under Section 191 of the Companies Act and is subject to regulatory approval.

“NicozDiamond Insurance Limited has received notification from FMHL of its intention to make a mandatory offer to buy out the remaining minorities in NDIL by way of  a scheme of arrangement in terms of Section 191 of the Companies Act (Chapter 24:03),” she said in a notice to shareholders yesterday.

Zvaravanhu, who is also NDIL company secretary noted that FMHL has an obligation, in terms of the ZSE listing rules requirements, to make a mandatory offer to the short-term insurance company’s minorities following its acquisition of 80,92 percent of the issued shares in NDIL.

“Pursuant to the aforesaid notice from FMHL, NDIL has commenced the necessary process to facilitate the proposed scheme of arrangement. To this end, a circular incorporating a notice convening the proposed scheme meeting will be issued as soon as all the regulatory and legal clearances have been procured. In view of the proposed transaction, shareholders are accordingly advised to exercise caution when dealing in their security,” she added.

The buyout  means that FMHL’s increased shareholding in NDIL, one of the country’s leading short-term insurance companies, has breached the threshold required by the ZSE for free flouting shares, which should be at 30 percent.

This means the ZSE listing rules 4.22 and 4.25 (d) does not allow the current shareholding structure at NicozDiamond Insurance Company.

Analysts said NicozDiamond’s board should consider recommending the delisting of the company in terms of ZSE’s listing rule number 1.10E.

—  The Financial Gazette

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