ZSE-listed insurance group, Fidelity Life Assurance of Zimbabwe has issued another cautionary statement to the investing public over trading of its shares as a potential capital restructure with effect on the share price looms.
The company issued shares by way of a rights offer as it seeks to raise capital internally to bolster operations- an exercise which started last year.
A rights offer is a group of rights offered to existing shareholders to purchase additional stock shares within a company.
“Further to the cautionary announcement dated 22 July 2019, and subsequent updates on 27 August, 23 September, 14 October, 04 November, 25 November, 16 December 2019 and 06 January 2020, the Directors of Fidelity Life Assurance Zimbabwe Limited (“Fidelity” or “the Company”) wish to advise all shareholders and the investing public that the company is still engaged in discussions that involve a potential transaction that may have a material impact on the value of the Company’s shares,” company secretary, Chipo Matongo said in a statement posted on the Zimbabwe Stock Exchange.
“The transaction involves the restructuring of the company’s capital structure through the issuance of shares by way of a rights offer. Further details of the transaction will be provided once discussions have been finalized. Shareholders are therefore advised to exercise caution when trading in the Company’s shares,” the statement read.
Last month the company announced a 154 percent rise in revenue for the nine-months to September 30, 2019 to $ 45 million despite sectorial headwinds in the context of currency changes and inflationary developments that took a hard knock effect on premiums.
The company hopes to refocus on its core-business of insurance going forward following limited fortunes in its property portfolio last year.
