Investors have given Botswana Insurance Holdings Limited (BIHL) a green light to proceed with its multi-million Pula deals, which will shake up its corporate structure once fully completed. An extra ordinary meeting held recently did not have any problems with allowing the leading assets management and insurance company to sell off its entire 51 percent in its subsidiary, Botswana Investment Fund Management (BIFM).
The transaction is worth P2 million, and specialist fixed income asset management owned BIFM Capital Management Africa (CMA) owned 49 percent of BIFM Capital. Directors of CMA, Rhys Carr and Tim Marsland told a press conference last month that the approval would bolster the company’s plans of taking their services to the rest of the continent.
“I am excited that the deal has been passed. This is what we have been looking for,” said Rhys on Wednesday afternoon. It was not possible to get a comment from Chief Executive Gaffer Hassam as his phone went unanswered several times.
In another transaction, BIHL shareholders also allow the company to release P41 million for the purchase of BIFM Capital Unit-BIFM Capital Investment Fund One (BCIF1).
Botswana Life Insurance Limited (BLIL) now owns BCFI1. BLIL controls well over 70 percent of life insurance business in the country. At the time of going to press, it was not immediately clear if other authorities have given the above deals a go ahead.
The competition watchdog, BLIL, BIFM and BIFM Capital together with the Non Bank Financial Regulatory Authority (NBFIRA), the regulator and Botswana Stock Exchange (BSE) will also have a say in the transaction, which is one of the biggest to happen in the local bourse this year.
In a separate statement, BIHL explained that the cash consideration, particularly for the second transaction would be made from shareholders funds. “Since BIFM is a subsidiary of BIHL, the ultimate impact of the net cash flow of transaction one and two on BIHL’s internal resources is an outflow in the range of approximately P13, 65 million and P18, 4 million,” said the company last week. BIHL currently manages over P16 billion-worth of assets.
For the six months ended June 30, 2012, operating profit for the group fell 36 percent to P108 million as weakening households’ disposable incomes weighed down Botswana Life.
Meanwhile, BIHL’s is currently ramping up activities ahead of close of books at the end of this month. The company is expected to release its full year results in December 2012.
A cautionary statement on what the result will look like is yet to be issued. At the close of markets on Wednesday, the company’s shares stood at 1034 thebe.