FORMER Africa First ReNaissance Corporation Limited (Afre) executive chairperson Patterson Timba has opposed plans by the financial services group to undertake an $8,6 million rights issue, saying a circular announcing the capital raising initiative had limited disclosure, the NewsDay has learnt.
Report by Bernard Mpofu
Timba, through his lawyers Muza&Nyapadi, wrote to the Securities Commission of Zimbabwe (SECZ) a fortnight ago querying Afre’s planned rights offer. The lawyers also wrote to the deal underwriters — the National Social Security Authority (NSSA), which has interests in the group.
NSSA general manager James Matiza yesterday declined to comment referring questions to the authority’s lawyers Scanlen&Holderness.
Questions sent to the lawyers were not responded to at the time of going to print.
Afre shareholders are expected to convene an extraordinary general meeting on the capital raising initiative on Friday.
The Zimbabwe Stock Exchange-listed group early this month announced an $8,6 million rights issue to recapitalise its entities and settle outstanding funds owed to policyholders.
“Our client, therefore, notes that in this proposal, NSSA is the judge, jury and executor, thereby exposing the proposal as self-serving. Given this massive conflict, is it not oppressive for NSSA and Capital Bank Corporation Limited to vote on this self-serving proposal?” Timba added.
Part of the proceeds, according to a circular issued on October 4, will recapitalise FMRE Life and Health ($1,5 million), FMRE Property and Casualty Zimbabwe, FMRE Property and Casualty Botswana ($2 million), Tristar Insurance ($1,65 million) and settlement of amounts owed to policyholders ($1,33 million). The rights offer is expected to cost $550 000.
The circular shows that in the event the remaining shareholders in the company, holding 48,7% of the issued shares, do not follow their rights under the proposed Rights Offer, NSSA will take up the shares.
“Should the proposed transaction result in the NSSA shareholding exceeding the ZSE listing requirements threshold, NSSA has undertaken to submit to the ZSE and SECZ an acceptable programme of reduction in shareholding to the required levels. The company intends to maintain the listing on the ZSE,” the circular read.
NSSA gained a controlling stake in Afre this year after it took over the then ReNaissance Merchant Bank and bought Econet’s shareholding in the financial services group.