Saturday, March 25, 2023

BIHL buys shares across the border in Malawi

As part of its mission to expand its business outside Botswana, Botswana Insurance Holdings Limited (BIHL) Group has acquired Nico Holding Limited, listed on the Malawian Stock Exchange and which also operates in five countries being Malawi, Tanzania, Uganda, Zambia and Mozambique.

BIHL announced that it intends to only acquire 25.1 percent of the issued ordinary shares in Nico, while the remaining equity is to be held by various other shareholders as it is a public listed company.

“BIHL at this stage does not intend to acquire the remaining 74.9 percent in Nico which is held by various shareholders,” reads the statement from the Group.

The company further stated that the opportunity presented to buy 261,760,272 shares representing 25.1 percent issued share capital in Nico was attractive because Nico’s business is well diversified into a number of financial services spanning over five countries in Southern Africa. The shareholding further offers BIHL an opportunity to expand into Southern Africa at a market related price with attractive growth opportunities and enhanced return on group equity value.

Information contained in the statement indicates that the aggregate purchase price payable for the transaction is approximately P 145 million, while the market value of Nico is MK 31.3 billion (which is approximately P 600m). The purchase price is to be discharged by way of cash settlement through an authorized broker of the Malawian Stock Exchange.

“Sanlam Emerging Markets owns 25.1 percent in Nico and 58.3 percent of the share capital in BIHL. The transaction involves parties that are related through the beneficial material shareholding that SEM has in both BIHL and Nico,” said BIHL.

Consequently the transaction is said to be deemed to be a related party transaction subject to section 10 of the BSE listing requirements. Meanwhile, locally BIHL Group has also acquired up to 50 percent of the issued share capital of Teledimo Proprietary Limited. Teledimo directly owns 50 percent of the shares in Botswana Insurance Company (BIC). The first of these transactions is said to be the acquisition of the 23.33 percent stake in Teledimo currently held by 21st Century Proprietary Limited and the 10 percent stake in Teledimo held by Tantamoga Investments Proprietary Limited.

Led by Chief Executive Officer (CEO) Gaffar Hassam, BIHL   also announced that the total consideration for the first transaction is P 82, 5 million while the apportionment for the first transaction is P 57, 5 million in respect of shares held by 21st Century and P 25 million for the shares held by Tantamoga.

“This transaction will allow BIHL and BIC to enhance their product offering and the ability to cross sell with a view of creating greater value for the shareholder,” said BIHL.


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