Afre seeks to raise US$8,6m

three new shares for every four shares already held at a price of US$0,053 per share.
“Your board has considered the state of your insurance business within the group and has taken the view that shareholder financial support is required in order to reposition the business for growth,” it said.
Afre subsidiaries that will benefit from the rights offer include FMRE Life and Health, FMRE Property and Casualty Zimbabwe, Tristar Insurance and FMRE Property and Casualty Botswana.
Of the proceeds, at least US$1,3 million will be set aside to settle debts to policyholders.
“The proceeds of the rights offer will be used to purchase investments that meet liquidity and solvency requirements and settlement of amounts owed to policy holders,” Afre added.
The National Social Security Authority, which is the major shareholder in Afre, will underwrite the rights issue.
Shareholders are, however, still required to approve the rights offer at an extraordinary general meeting set for October 26.
The Afre board warned that failure by shareholders to approve the rights offer would have dire consequences for the group. Such consequences included failure by its subsidiaries to effectively compete in the market, failure to meet solvency ratios as well as potential to lose market share through limited capacity to underwrite.
Afre is a diversified financial service company with interests in insurance, property and actuaries services.-New Ziana