Published: 15 August 2017

First Mutual  Life Holdings Limited (FMHL) last week announced plans to pursue a rights offer to raise $17,25 million, the businessdaily can report.

The implementation of the rights offer will depend on the Zimbabwe Stock Exchange-listed FMLH shareholders who are expected to approve the transaction at an extraordinary general meeting (EGM) to be held in the capital at the end of this month.

The funds will be earmarked towards the acquisition of NicozDiamond's 80,92 percent shares.

The transaction will be 90 percent underwritten by the National Social Security Authority (Nssa), the majority and controlling shareholder of both FMHL and NicozDiamond; while 10 percent will be underwritten by LHG Malta Holdings.

NSSA and LHG have committed to follow their respective rights and will, therefore, underwrite the portion outside their combined portions.

In a circular to shareholders published last week FMHL said: "FMHL proposes to raise $17,25 million by way of a renounceable rights offer of 210 371 395 new FMHL shares with a nominal  value of $0,001 at  a ratio 44 new FMHL ordinary shares with a nominal value of $0,001 per share for every 100 FMHL ordinary shares with a nominal value of $0,001 per share held as of the FMHL rights offer record date at a price of 8,20 cents per FMHL ordinary share."

The proposed NicozDiamond acquisition will result in the merging of NicozDiamond and Tristainsurance Company, who are both short-term insurers into a single short-term insurance entity.

The insurance firm will also seek shareholders' approval at the EGM to merge the two short-term insurance companies.

According to the circular to shareholders, FMHL added: "Subsequent to the acquisition of NicozDiamond, the board proposes to merge NicozDiamond and Tristar operations into a single short-term insurance entity.

The mechanism of the proposed merger will depend on FMHL's ultimate shareholding in NicozDiamond and the process is expected to take up to 24 months to complete.
- dailynews

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