Published by the government of Zimbabwe
Walter Muchinguri
30 June 2009
Harare — INSURANCE concern, Zimnat Lion Insurance Company, yesterday de-listed from the Zimbabwe Stock Exchange to pave way for its complete takeover by its parent company, TA Holdings.
The de-listing also coincided with the share swop that saw minority shareholders in Zimnat receiving ten TA shares for every 175 of their Zimnat shares. Shareholders holding less than 18 shares received one TA share each.
The de-listing and share swop puts a lid on a process that started in March this year with various cautionaries and High Court applications and hearings to sanction the scheme.
The scheme sailed through after it was sanctioned by the High Court last week and the court order was duly filed with the Registrar of Companies to make it unconditional and binding.
Zimnat shareholders had earlier on voted overwhelmingly in favour of the takeover at a scheme meeting held two weeks ago.
The scheme was necessitated by the fact that TA Holdings and its associates were holding 84,80 percent of issued shares in the insurer, which was in breach of ZSE normal minimum free float requirements of 30 percent of issued share capital in any listed company.
TA Holdings was also reported to be planning to re-capitalise the insurer hence its desire to assume its full control.
There has been an urgent need for insurance companies in the country to refocus on core business due to an improvement in the operating environment that has been stabilised by the adoption of the multiple currency system.
Most insurers have, during the past five years, been relying heavily on revenue generated stock market investments as opposed to their core business of underwriting.
Analysts believe that Zimnat is currently unable to generate sufficient cash to re-capitalise from the lukewarm stock market.
Zimnat currently has a market capitalisation in excess of US$2,2 million.
Zimnat, which is one of the oldest insurers in the country, has managed to weather the storm and helped TA achieve an operating profit of US$381 000 for the period ending December 31 2008.
It was formed in 1999 out of the merger of Zimnat Insurance Company and Lion of Zimbabwe.
The new entity Zimnat Lion was subsequently listed on the local bourse in 2001.
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