First Mutual to de-list from ZSE

First Mutual Holdings Limited (FMHL) will de-list from the Zimbabwe Stock Exchange (ZSE) once CBZ Holdings completes acquisition of some shares in the company.

An extraordinary general meeting of CBZ shareholders held early this week approved the acquisition of 31,2 percent equity in the insurer through a combination of cash and equity swap.

Prior to the transaction, CBZ held 3,23 percent stake in FMHL through a special purpose vehicle (SPV) operated under the name PIM Nominees (Pvt) Limited.

CBZ acquired the shares from NSSA constituting 31,22 percent of the issued ordinary shares of FMHL, which took CBZ Holdings Limited’s total interest to approximately 34,45 percent.

Blessing Mudavanhu, CBZ’s group’s chief executive, said during a post EGM briefing to journalists the plan was to create a consolidated group that had capacity to compete both locally and regionally.

“The group will walk through all steps required and there will be an offer to minorities at some point which will culminate in the de-listing of FMHL from the ZSE,” he said.

FML is the second largest insurance company in the country with regional operations in countries such as Botswana, Malawi, Mozambique and Zambia.

At the EGM, directors were authorised to make further acquisitions sufficient to achieve a control block in FMHL and thereafter to make a mandatory offer to the remaining shareholders of FMHL.

This is in compliance with the Companies and Other Business Entities Act (Chapter 24:31) as read with the Zimbabwe Stock Exchange Listing Requirements pursuant to which the consideration shall be settled through cash and or the issuance of new CBZ Holdings Limited shares.
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Mr Mudavanhu said since FMHL was predominantly an insurance company; the intention was to have one big, strong insurance company, though merging it the group’s own insurance cluster.

“The CBZ insurance cluster includes CBZ Life and CBZ Insurance. The consolidation is our short term vision and this will be done as soon as possible,” he said.

Mr Mudavanhu noted that there were a lot of complementary assets and resources the group had, therefore, in some areas CBZ might be stronger and in other areas FML may be stronger.

“This is a great opportunity to take the best in the market and within both companies and to create what will be the leading insurance company in the country,” he said.

Mr Mudavanhu added that this will also give CBZ Holdings an opportunity to increase regional presence which it didn’t have prior to this marriage.

According to a trading update for the quarter ended September 30 2021, FMHL’s net premium earned at $6,5 billion, was 88 percent above prior year due to organic growth and above rate revisions of sums insured to align with the exchange for the short-term insurance policies.

Rental income grew to $365 million from $228 million due to quarterly rental reviews and improvement in occupancy rates to 89,48 percent from 88,22 percent in 2020. FMHL’s total assets grew by 21 percent from December 2020 driven by positive gains realised on listed equity investments, fair value gains on investment property and revaluation of foreign denominated assets.-The Herald