Diversified investment holding company, Zimre Holdings (ZHL) has entered into a share purchasing agreement with the National Social Security Authority (NSSA) for the purchase of its 35.09 percent stake in insurance firm, Fidelity Life Assurance (FLA)as it focuses on growing its asset base.
Zimre already holds 20.57 percent in the life insurer and if the deal is successfully concluded will result in ZHL being the majority shareholder with a 55.66 percent stake.
“The transaction, which is subject to shareholder approval, will result in Fidelity becoming a subsidiary of Zimre and its operations being consolidated in the financial statements of the group,” Zimre said in a statement.
Fidelity operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services and also has other subsidiaries involved in the provision of micro lending, medical aid, asset management and actuarial services.
Fidelity which has been struggling for capitalization due to increased operating costs in May this year posted a profit after tax of $74 million during the period ended December 2019, recovering from a loss position of $3, 8 million prior year.
ZHL is also in negotiations for a complete share acquisition in listed Zimre Property Investments (ZPI) were it currently holds 64.3 percent in the group.
The deal will result in ZPI being de-listed from the Zimbabwe Stock Exchange and be consolidated under ZHL.
“Delisting of ZPI will ease the restructuring of the business composition, enabling a leaner and more focused business structure,” said the group.
Once the acquisitions of FLA and ZPI are complete, Zimre will have a combined asset base of $2.07 billion and shareholders’ equity of $837 million.
A strong asset base will also enhance future capital raising efforts as the balance sheet will now be anchored by a significant property portfolio comprising a mixture of properties in prime locations around the country.
