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Enacy Mapakame
Business Reporter
Diversified financial services group, Zimre Holdings Limited (ZHL), has acquired a controlling stake in Fidelity Life Assurance of Zimbabwe in a transaction that is expected to boost the former’s asset base.

This follows purchase of an additional 35 percent stake in Fidelity.

In September, ZHL tabled a share purchase agreement with shareholders of Fidelity as well as those of property firm, Zimre Property Investment (ZPI) to give the group total control of the two firms.

In a joint statement ZHL and Fidelity said: “Shareholders are advised that Zimre Holdings Limited (ZHL) has acquired a control block in Fidelity Life Assurance Company Limited (FLA) and the full impact thereof is being determined.

“In the meantime shareholders are advised to exercise caution when dealing in the securities of both FLA and ZHL until a full announcement is made.”

In a circular published in September by ZHL, the group entered into a share purchase agreement with the National Social Security Authority (NSSA) for the purchase of a majority stake in Fidelity.

This result of this deal, according to the group will see ZHL re-integrate with Fidelity’s operations, which it unbundled in 2003.

The circular revealed that ZHL was to purchase NSSA’s 35,09 percent stake in Fidelity in addition to the 20,57 percent that ZHL already held in the life insurer. A 55,66 percent stake therefore makes ZHL the majority shareholder in Fidelity.

Fidelity then becomes a subsidiary of ZHL with its operations being consolidated in the financial statements of the group.

Fidelity operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services.

It also has several other subsidiaries involved in the provision of microlending, medical aid, asset management, actuarial services as well as property development.

The company has been struggling for capitalisation as it reels under the strain of huge operating costs.

Its acquisition was done through a share swap agreement where NSSA was issued with 65,14 million authorised but unissued ZHL shares on the basis of 1 ZHL ordinary share for every 0,59 FLA shares held by NSSA.

The Fidelity acquisition shares constituted 4,25 percent of the ZHL total issued ordinary shares.

The group also acquired the entire shareholding in ZPI.