Peter Munga’s Plum LLP, one of Britam Holdings key shareholders has entered into a Share Purchase Agreement to sell 348,504,000 ordinary shares to Zurich-based reinsurer Swiss Re. Once the proposed sale is complete, Swiss Re will acquire about 13.81 per cent of the issued ordinary shares of Britam.
Britam said in a public announcement: “Britam Holdings Plc has been informed by one of its key shareholders, Plum LLP, that on June 11, 2018 [it] entered into a Share Purchase Agreement with Swiss Re Asset Management Geneva S.A., Carouge, pursuant to which Swiss Re will purchase 348,504,000 ordinary shares in Britam from Plum The Proposed Sale is subject to conditions that are customary to transactions of this nature, including but not limited to receipt of regulatory approvals from the Capital Markets Authority, Insurance Regulatory Authority and the Central Bank of Kenya.”
The proposed share sale will see Plum LLP dispose part of the 452.5 million shares it acquired from Mauritian national Dawood Rawat after he was accused of operating a Ponzi scheme.
“It is not our intention to hold the acquisition shares for the long term. The purpose of the proposed acquisition of the shares is to allow Britam and its shareholders the time they require to identify a suitable investor,” Peter Munga said through Plum LLP when the deal was announced in July 2016.
Plum made the first sale of 104 million shares last year in an attempt to sell all the shares by August 2018.
Possible Benefits of the Current Proposed Share Sale
According to Britam’s public announcement, Swiss Re will bring onboard experience in mergers, capital raising, expansion, and acquisitions. The global reinsurer will also improve Britam’s financial flexibility and offer access to technical experts within its global network.
As of December 2017, some of the top owners of Britam were Equity Holdings (18.7 per cent), Plum LLP (16.1 per cent), and IFC (10.4 per cent).
The founders of Britam Kenya have been decreasing their stakes in the company since going public in 2011 a move that has seen AfricInvest recently acquire 14.3 per cent equity in Britam.
Now IFC wants the founders to keep a combined stake of at least 20 per cent until October 2019 as a way to show their commitment to the company.
AfricInvest’s and IFC’s investment in Britam shows confidence in Britam’s potential to grow. The investment will be used to boost digitisation, expansion, and the creation of new products.
Other major shareholders of Britam include Benson Wairegi, James Mwangi, and Jimnah Mbaru.