© FIDELITY Life Assurance says it is still in the market to raise capital through a rights offer.
“Fidelity wish to advise all shareholders and the investing public that the company is still engaged in discussions that involve a potential transaction that may have a material impact on the value of the Company’s shares. The transaction involves the restructuring of the company’s capital structure through the issuance of shares by way of a rights offer,” the company said.
Markets research firm Equity Axis said the transaction is likely to involve the offer of additional shares to existing shareholders on a pro rata basis.
For example, the company may offer one additional share for every five shares readily held by existing shareholders. The offered shares would typically be priced at a relatively favourable price to the market share price of the same stock.
Over the past few years Fidelity has realised an overweight on the property side, whose income emerged to eclipse that from core insurance business. The major challenge was that as income from property sales grew, that from insurance dwindled.
Other players offering life insurance began to eat into Fidelity’s space, as the company lost edge and focus, while resources were chasing the property buck.
In 2017, the group undertook a major restructuring exercise which into 2019, was still ongoing. The restructuring exercise focuses on returning the business to its core mandate of insurance.
Fidelity sits on a massive land bank known as Langford Estates, which was acquired from CFI a couple of years ago. This land bank could unlock further potential on the property side of the business.