HARARE,– State-run pension fund, the National Social Security Authority (NSSA) has taken control of Zimbabwe’s largest short-term insurer NicozDiamond and is making a mandatory offer to minority shareholders at an offer price of 2,75 cents per share.
On the 7th, 21st and 24th of November last year, NSSA bought a total of 88,974,652 shares of NicozDiamond, representing 15,7 percent of the total issued share capital of the company. This brings its total shareholding in the insurer to 44,85 percent.
The pension fund reportedly purchased stakes held by LAG Malta belonging to foreign investor Noel Hayes (4,3 percent) and part of the stake held by Bruce Campbell who held just over 10 percent.
According to ZSE listing rules, a company which has acquired a shareholding exceeding 35 percent should make a mandatory offer to minority shareholders of the acquired listed company.
“NSSA having exceeded the 35 percent threshold, is thus making a Mandatory Offer to all NicozDiamond Insurance Limited shareholders at an offer price of $0,0275 per share held,” NicozDiamond said in a circular to shareholders.
The offer price at 2,75 cents represents a 10 percent premium from the closing price of 2,5 cents on Friday.
The pension fund, which has 70 percent of its investments in the equities market, has interests in 53 of the 60 companies listed on the Zimbabwe Stock Exchange, holding at least 10 percent shareholding in 12 counters.
NSSA is also among the largest shareholders in RTG, Turnall and ZB Financial Holdings where it owns 36 percent, 32 percent and 38 percent respectively.
It says it does not intend to delist NicozDiamond from the local bourse and has arranged $8,6 million from its own funds to pay for the offer
“The Offeror are using their own funds to settle all obligations arising from the offer. A letter of commitment has been provided by NSSA principal bankers for funding equivalent to the possible total value of the Mandatory Offer being $8,595,914,” reads the circular.
In the medium term NicozDiamond intends to enhance the regional investments and improve its market positioning while improving returns from the investments.
Last week Nicoz Diamond reported a 41 percent drop in net profit to $959,798 in the full year to December 31 from $1,64 million in the previous year after its regional operations suffered from unstable economies.
Operating profit dropped 43,7 percent from $1,9 million in the previous year to $1,07 million on the back of reduced revenue and poor performance of the Malawian operation. Gross premiums written (GPW) fell five percent to $37 million compared to $38,7 million in 2015.
The short term insurer last year disposed of its underperforming Ugandan operation, First Insurance Company (FICO).