Insurers, Fidelity Life and Zimre Holdings trapped in CFI Holdings shareholding debacle
Insurance24 reporter
HARARE, Fidelity Life Assurance may find itself in drenched position if Messina Investments successfully execute its bid to reverse the Langford Estates land sale, the transaction it has branded illegal.
Fidelity has since begun the necessary processes to commence construction of about 11 500 high density residential stands at Langford with an estimated market value of $350 mln.
Meanwhile, Messina Investments which is fighting Stalap Investments’ Offer to Minorities is seeking support from minority shareholders Not to sale their shares and support the reversal of the Fidelity Life transaction.
“We urge all minority shareholders not to sell their shares but support us in the reversal of the Langford land sale and in combatting the further destruction of shareholder value that a return to Zimre/Nssa control entails. In any event, the current ZSE market price is considerably higher than the offer price of 22 cents from Stalap,” said Messina.
Zimre Holdings and NSSA are the controlling shareholders of Stalap which recently made a 22 cents offer to minorities.
According to Messina, the sale of Langford Estates to Fidelity was illegal due to several issues that include that the purchaser, Fidelity Life was a related party as defined by the Zimbabwe Stock Exchange (ZSE) rules.
It is also alleged that the independent property valuation of the Langford land was prepared in April 2014, not for CFI but for FBC who were a conflicted and related party to NSSA and Fidelity.
In addition that, Messina said the market value of the land was stated to be $2.20 per square metre when the true value was nearer $6.00 per square meter.
The Transaction
Fidelity Life Assurance shareholders approved the land for debt swap deal which saw FLA assuming CFI’s $18 mln debt in the form of $16 mln bank debts and settlement of $2 mln to other creditors.
The acquisition of 81% of CFI Holdings’ Langford Estate was envisaged to strengthening the insurance and property developer’s balance sheet giving it capacity to underwrite more business, bringing additional insurance income amounting to $8,7 mln.
Langford Estates comprises of 834 hectares and is expected to yield 11 264 residential stands.
Messina Investments
Messina said on the 2nd of May this year served formal notice on CFI calling for a new Extraordinary General Meeting to cancel the Langford sale transaction.
Messina is an international investment holding Company owned by business tycoon Nic Van Hoog and incorporated in the British Virgin Islands with an issued and fully paid up Share Capital of $10 mln, current assets of over $200 mln and no debt.
The Bidding war
Messina Investments has since more than doubled Stalap’s 22 cents offer to 46 cents as the battle to control the agro-concern rages on. Messina claims that together with its associates and supporters own 42% of CFI holdings.
