IFC signals further investment in Britam after Sh3.5bn stake
Britam Group managing director Benson Wairegi makes a point during the release of the company’s 2016 full-year results in Nairobi Monday, March 27, 2017. PHOTO | SALATON NJAU | NMG
Britam’s shareholders approved the deal at a general meeting on Friday.
IFC says no new shares shall be issued at a price lower than Sh15.85 apiece at which it has bought into Britam during the 12-month period.
The company’s largest shareholders have also agreed to retain ownership of at least 20 per cent in the company.
The International Finance Corporation (IFC) says it is willing to make an additional investment of up to $60 million (Sh6 billion) in insurance group Britam in the next 12 months.
IFC has already committed to invest Sh3.5 billion in the Nairobi Securities Exchange-listed firm, making it the second-largest shareholder with a 10.3 per cent stake.
Britam’s shareholders approved the deal at a general meeting on Friday.
IFC says it could invest more should the insurer seek to raise new capital on terms that are more favourable than the ones offered to the international financier in the Sh3.5 billion deal.
“Subject to the IFC’s rights to require that any more favourable terms agreed with another investor be offered to IFC, an issue of shares to the value of a maximum of $60 million of additional capital,” reads part of the conditions set out by the IFC in a Britam circular.
This means that Britam is limited to raising up to Sh6 billion of new capital in a year after IFC has been allotted the 10.3 per cent stake, with the international financier keen to ensure its deal sets the base for new fundraising in the short term.
No new shares
IFC says no new shares shall be issued at a price lower than Sh15.85 apiece at which it has bought into Britam during the 12-month period.
Should the insurer seek to raise new capital on other conditions that are better than those offered to IFC in the first transaction, the international financier wants to be given those same terms.
IFC says it will also amend its current deal with Britam to reflect those better terms. Britam is also restricted from issuing new stock except bonus shares or rights issues in the same period.
The company’s largest shareholders have also agreed to retain ownership of at least 20 per cent in the company.
The firm reported a net profit of Sh2.4 billion in the year ended December, reversing a net loss of Sh1 billion the year before as claims fell by Sh5.2 billion on adoption of a new valuation methodology.
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