Fidelity Life Assurance Zimbabwe has ended plans to raise new capital through a proposed rights offer.
“The directors of Fidelity Life Assurance of Zimbabwe wish to advise all shareholders and the investing public that the company is no longer undertaking the rights offer as indicated in the previously published cautionary statements,” said Fidelity Life this week.
“As such the company withdraws its cautionary statement.”
Fidelity operates three insurance businesses, Fidelity Life Assurance, Vanguard Life Assurance and Fidelity Funeral Services.
It also has several other subsidiaries involved in the provision of microlending, medical aid, asset management and actuarial services.
Fidelity Life Assurance has been struggling for capitalisation as it reels under the strain of huge operating costs.
The company’s capital is made up of $22 million in equity while the balance of $231 million is in liabilities.
The move by Fidelity to cancel its proposed rights issue is perhaps linked to its recent acquisition by Zimre Holdings Limited (ZHL).
ZHL confirmed that it had entered into an agreement with the National Social Security Authority (NSSA) for the purchase of its 35.09 percent stake in Fidelity Life.
ZHL presently holds 20.57 percent of the life insurer and the acquisition will see it become the majority shareholder in the company with a 55.66 percent stake.