The National Social Security Fund (NSSF) leveraged its four percent stake in HF Group to get a board seat for its managing trustee Anthony Omerikwa, according to sources familiar with the matter.
Dr Omerikwa recently joined the board of the Nairobi Securities Exchange #ticker:NSE -listed firm as a non-executive director. His appointment comes as insurance firm, Britam Holdings prepares to sell all or part of its interest in HF.
NSSF is also a significant shareholder in Britam with an eight percent stake. The planned divestment from HF comes after the insurer booked multi-year losses from its 48.2 percent ownership in the mortgage financier that wants to transition into mainstream banking.
The proposed transaction, which is still in early stages, is expected to follow Britam’s #ticker:BRIT recent announcement of the sale of its 6.7 percent ownership in Equity Group #ticker:EQTY to the International Finance Corporation (IFC) for Sh13.9 billion.
The deals mark Britam’s cutback of its exposure in the banking sector which has produced mixed results. The insurer has reaped big profits through dividend income and capital gains from its investment in Equity which has grown to become the country’s largest bank.
Britam’s investment in HF has on the other hand generated losses running into billions of shillings, with the associate suffering from a slowdown in the real estate market and the lending rate control that was in place between September 2016 and November 2019.
Britam has been supporting HF including an injection of Sh1 billion subordinated medium-term loan to bring the mortgage financier into compliance with minimum capital requirements after years of losses eroded its asset base.
The insurer invested more than Sh5 billion to acquire the HF stake through several transactions, including the buyout of Equity Group’s 24.7 percent ownership in the mortgage lender in 2014 for Sh2.8 billion.