NSSA to up stake in Afre

THE National Social Security Authority (NSSA) is expected to increase its stake in financial services concern Africa First ReNaissance (Afre Corporation) after a recently held rights offer was undersubscribed.

Report by Bernard Mpofu Chief Business Reporter

According to a notice issued by the company on Friday, the $8,6 million rights offer recorded a subscription rate of 27,1%, indicating the pressing liquidity constraints on the domestic market.

Out of the 162 842 928 shares issued under the rights issue, only 44 105 883 shares were subscribed and applied for by the existing shareholders.

A rights offer is a capital-raising exercise which entails offering existing shareholders of securities to purchase further securities in proportion to their holdings made by means of the issue of renounceable letter or other negotiable documents which may be traded for a period before payment for the securities is due.

In October this year, Afre shareholders approved the rights issue to recapitalise the group’s entities and settle outstanding funds owed to policyholders.

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

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 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.

“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,” read a circular which was published before the rights offer.

The Afre rights issue almost faced an impediment when former executive chairman Patterson Timba threatened to block the capital-raising exercise. Timba, however, did not get enough support when shareholders convened an extraordinary general meeting in October.

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1 Comment

  1. Why are the fund managers at NSSA taking the easy route out all the time? Why are they not using the funds in their portfolio to bail out some industries which are closing, throwing their membership into the streets? As a national social security company why are they investing in only one sector of the economy (financial) which is soiled beyond repair as is and is responsible for constricting productive sectors of the eocnomy. There should be a rule that NSSA investments should be balanced with a heavy tilt towards the productive sectors of the economy as banks have removed themselves out of this equation anyhow? Why are they not following the lead of Old Mutual which is operating like them in the pension and insurance sector which is assisting via Cabs? The fact that NSSA falls under the portfolio of the Minister of Labour should make this mandatory..Madam Minister are NSSA fund managers whose corruption is in the public domain really serious about contributing to improvement of the general welfare of workers in this country?

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