NSSA to dispose stake in NicozDiamond

THE National Social Security Authority (NSSA) is set to dispose of its controlling stake in insurance firm NicozDiamond to First Mutual Holdings Limited under nine months after boosting its equity in the company.

FML yesterday specified plans to acquire a controlling interest in an unnamed insurance firm, although indications point to that insurance company being NicozDiamond Insurance Limited (NDIL). Not least because NicozDiamond concomitantly issued its own cautionary to shareholders “that it has been informed by its major shareholder of the intention to dispose of its interest in NDIL to another insurance group subject to conditions precedent including regulatory approvals as well as shareholder approval.”

In its cautionary, FML said it is “contemplating the acquisition of a controlling interest in a company in the insurance sector.”

The State-run pension fund is NDIL’s majority shareholder after purchasing 88,9 million shares (15,7 percent of the company’s equity) last November. NSSA’s purchase of 88 974 652 shares for the value of $1 557 696 boosted its share of NDIL to 44,85 percent, making it the majority shareholder ahead of Zimre Holdings, which holds a 28, 58 percent stake.

Earlier in March the pension fund made a mandatory offer to minority shareholders of NDIL — as per Zimbabwe Stock Exchange (ZSE) requirements — eventually increasing its stake in the company to 50, 9 percent. So the question is why is NSSA pulling out so fast?

In presenting its arguments for the mandatory offer earlier in March, NSSA said it “intends to support the management team of NicozDiamond in the following plans: The business’ short term goals are to consolidate its position on the local market and entrench its market leadership position through efficient processing of claims, excellent customer service, introducing customer convenience and coming up with market responsive solutions.

“In the medium term, the company intends to enhance the regional investments and improve their market positioning while improving returns from them for diversification of income streams.

“In the long term, the business aims to be a strong and well recognised African insurer with significant presence on the African continent.” — BH24