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A BOTSWANA-based firm, Aleyo Capital, has acquired a 29.1 percent shareholding in First Mutual Holdings Limited’s (FMHL) re-insurance business for 61 million Botswana Pula (about US$5.3 million), the Zimbabwean firm has said.
FMHL struck the deal as part of its restructuring and capital raising exercise under which the financial services company has established a new subsidiary, First Mutual Reinsurance Holdings Limited (FMRHL), which will be domiciled in Botswana, to house its two re-insurance businesses.
FMRHL will be the parent firm for Zimbabwean based First Mutual Reinsurance Company Limited (FMRE Zimbabwe) and FMRE Property & Casualty (Proprietary) Limited which is in Botswana.
In a circular, FMHL chairman, Raymond Manzai said: “The transaction is pursuant to a capital raising exercise undertaken by FMHL for its reinsurance businesses to house the capital in a stable economy, in Botswana.”
“The capital raised will be utilized to capitalise FMRE Zimbabwe and FMRE Botswana, and to further boost the subsidiaries’ solvency, liquidity and other technical considerations to support expansion.”
While FMHL owns 100 percent of FMRHL, Aleyo Capital, a Botswana based private equity firm, will own a 29.1 percent shareholding in the latter.
The deal is however still subject to shareholder approval at an extra-ordinary general meeting to be held on September 28.
It will also require the green-light from the Zimbabwe Stock Exchange, the Competition and Tariff Commission, the Reserve Bank of Zimbabwe, the Insurance and Pensions Commission of Zimbabwe and the Non-Bank Financial Institutions Regulatory Authority of Botswana.
Besides the re-insurance companies, other FMHL subsidiaries include First Mutual Life, First Mutual Properties, First Mutual Health, Nicoz Diamond Insurance Company, First Mutual Wealth Management.
– New Ziana
Online Reporter