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Afre seeks $8,6m through rights issue

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ZIMBABWE Stock Exchange-listed financial services concern Africa First ReNaissance (Afre Corporation) has embarked on a $8,6 million rights issue to recapitalise the group’s entities and settle outstanding funds owed to policyholders.

ZIMBABWE Stock Exchange-listed financial services concern Africa First ReNaissance (Afre Corporation) has embarked on a $8,6 million rights issue to recapitalise the group’s entities and settle outstanding funds owed to policyholders.

Report by Bernard Mpofu, Chief Business Reporter

  According to a circular issued by the company yesterday, Afre directors have resolved to offer shareholders 162 842 928 rights offer shares for subscription at a ratio of three rights offer shares for every four shares already held, at a price of $0,053 each for an aggregate amount of $8 630 675.

  Shareholders were expected to convene an extraordinary general meeting on the capital-raising initiative on October 19. The transaction, according to the circular, will not have a direct impact on the composition of the board of directors and the management team.

 

The circular, however, stated that shareholders who will attend the extraordinary general meeting in person or by proxy, will be called upon to consider certain resolutions that may result in the removal of certain directors of the company in compliance with the corrective order issued by IPEC.

  “The board of directors is proposing a rights offer to recapitalise the company by raising $8 630 675. The purpose of this document is to furnish Afre Corporation shareholders with the requisite statutory and regulatory information relating to the rights offer and to detail the action to be taken by each shareholder,” reads part of the circular.

  “The proceeds of the rights offer will be used to purchase investments that meet liquidity and solvency requirements, and settlement of amounts owed to policyholders.”

  The National Social Security Authority is expected to underwrite the transaction. Part of the proceeds, the company said, will recapitalise FMRE Life and Health ($1,5 million); FMRE Property and Casualty Zimbabwe; FMRE Property and Casualty Botswana ($2 milllion); Tristar Insurance ($1,65 million) and settlement of amounts owed to policyholders ($1,33 million). The rights offer is expected to cost $550 000.

  “In the event that the remaining shareholders in the company, holding 48,7% of the issued shares, do not follow their rights under the proposed rights offer, the underwriter will take up the shares,” the circular further read.

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