The Herald (Harare)

Zimbabwe: NSSA Takes Over Afre

NATIONAL Social Security Authority has increased its direct shareholding in Afre Corporation to 51 percent after underwriting the group's US$8,6 million rights offer. Before the transaction, NSSA had a 21 percent shareholding in Afre. Indirectly, NSSA also holds some shares in Afre through Capital Bank, previously known as Renaissance Merchant Bank.

But Capital Bank, which owned 33 percent of Afre stake before the cash call did not follow its rights and the extent of the dilution could not be ascertained by the time of going to print. Prior to the rights issue, NSSA, directly and indirectly owned 54 percent of Afre.

If the transaction resulted in NSSA's shareholding exceeding the Zimbabwe Stock Exchange Listing Requirements threshold, the fund said it would submit to the ZSE and the Securities Exchange Commission a plan to lower its stake to the required levels.

Of the 162 842 928 shares issued, 27,1 percent were subscribed with NSSA taking over the remaining 118 737 045 shares.

About US$8,6 million was raised.

NSSA bought Econet's 19,7 percent stake in Afre in February this year through a special bargain involving

42 798 497 shares at a price of US18,42c per share, reflecting a premium of about 514 percent. The deal came a few days after NSSA took over an 84 percent stake in RMB in a deal worth more that US$24 million.

Before acquiring Econet's stake, the social fund had about 2 percent in the insurance firm. The rights offer was undertaken to address minimum capital and solvency requirements of Afre's insurance businesses, namely Tristar Insurance, FMRE Life & Health, FMRE Property & Casualty Zimbabwe and FMRE Property & Casualty Botswana.

Of the rights offer proceeds, US$1,5 million will go to FMRE Life and Health, US$1,6 million to FMRE Property and Casualty Zimbabwe, US$2 million to FMRE Property and Casualty Botswana, US$1,65 million to Tristar, while the balance will go towards settling amounts owed to policyholders and the costs of the offer.

First Mutual Life, the largest subsidiary of Afre Corporation, will not be allocated fresh capital as

the business is deemed to be on a sound financial footing.

The rights offer was approved despite opposition from former chairman Mr Patterson Timba who had written to the SECZ seeking to stop Afre from holding an extraordinary general meeting that sought shareholders approval for the right issue.

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