Following its first attempt to up its stake in the Funeral Service Group, which hit a snag, the country’s leading insurance company, the Botswana Insurance Holdings Limited (BIHL) has finally managed to clinch a deal that saw it boosting its stake in the undertakers company.
Chief Executive Officer of the BIHL group, Gaffar Hassam, confirmed the transaction to Sunday Standard this week revealing that his company has since increased its stake in FSG from the initial 28 percent to 34 percent.
Last year, shareholders of Botswana’s premier funeral services company, Funeral Services Group refused to let go of their shares to BIHL following an offer that was considered to be too ‘low’.
As a result, BIHL’s attempt to raise its stake was temporarily offset, as both parties could not agree on the set price from the offeror. BIHL Chief executive later disputed the reports saying that the two parties only differed on ‘modalities’.
However, BIHL, which is partly owned by Sanlam of South Africa, was determined to increase its stake in FSG, which is considered to be the leading undertakers group in the country. The company also has operations in Zambia where coincidentally BIHL also owns some assets.
FSG is the biggest funeral services provider in Botswana with intent to go into the African subcontinent. Under its umbrella, the group includes Lyn’s and Kagiso Funeral Parlours and M&N Coffin & Casket Manufacturers.
Hassam told Sunday Standard that although his company still has capital to further increase its stake in FSG, they might be governed by the Botswana Stock Exchange requirements which gave capped the minimal shareholding at 35 percent.
“We believe that FSG is a good company. We also have a good working relationship with them that is why we wouldn’t mind increasing our stake again. However in doing so we ought to look at things such as liquidity as well as requirements by the stock exchange,” Hassam said.
One of BIHL’s subsidiaries, Botswana Life Insurance Proprietary Limited, which by volume and equity is FSG’s largest corporate shareholder, provides the bulk of the FSG’s funeral insurance cover.
BIHL, which at some point went through restructuring at corporate level, also has investments at Letshego Holdings; a micro lending company which is also listed separately just like FSG.