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Enacy Mapakame Business Reporter
First Mutual Holdings Limited (FMHL) will increase its stake in NicozDimond Insurance Limited (NDIL) to 100 percent if shareholders approve the proposal at a meeting to be held at the end of this month.

This comes as FMHL had acquired 80,92 percent shareholding in NDHL late last year, a move that should see the short term insurer de-list from the Zimbabwe Stock Exchange (ZSE).

Once Zimbabwe’s biggest and only listed short-term insurer becomes 100 percent owned by FMHL, it would be merged with Tristar Insurance, already a unit of FML.

FMHL has therefore proposed to acquire the remaining stake in NicozDiamond through an offer to buy out minorities through a Scheme of Arrangement, to be put to the vote of members.

“The directors of NDIL are taking the necessary steps to facilitate the proposed scheme and the issuance of this abridged circular to NDIL shareholders is part of the process to implement the proposed Scheme.

“In an announcement published on December 6, 2017, and March 22, 2018, FMHL advised the market that it had acquired 80,92 percent shareholding in NDIL and that consequently, it was going to make an offer to purchase the remaining issued NDIL shares held by minority shareholders scheme shares.

“To this end and as aforementioned, FMHL proposed to implement the offer by way of a scheme,” said NicozDiamond in a circular to its shareholders.

According to the circular, if the scheme is implemented, members will receive either 10 FMHL ordinary shares for every 43 NDIL ordinary shares held or a cash consideration of 3,41 cents per each NDIL ordinary share already held, and NDIL will become a wholly owned subsidiary of FMHL.

If implemented, the benefits will be that the arrangement will give the new FMHL ordinary shares an opportunity to remain with tradable securities in an enlarged and diversified group.

For FMHL, this will allow the insurance giant to merge NDIL with Tristar Insurance bringing benefits such as enlarged clientele base and increased new business underwriting capacity.

“If realised, these benefits will accrue to both current FMHL shareholders and the Scheme Shareholders who will elect to receive shares in FMHL,” reads part of the circular.