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Business Writer
First Mutual Holdings Limited shareholders on Monday approved an ordinary resolution that gives the company the go ahead to raise $439,2 million (BWP61 million/US$5,3 million) by selling a 29,1 percent stake in its 100 percent owned subsidiary, First Mutual Reinsurance Holdings (FMRE) to Aleyo Growth Fund of Botswana.
FMRE, is the holding company for First Mutual Reinsurance Company Limited (“FMRE Zimbabwe”) and FMRE Property & Casualty (Proprietary) Limited (“FMRE Botswana”).
Aleyo’s principal investors are Botswana-based pension funds and institutional investors.
The subscription amount is to be used to capitalise the subsidiaries to enhance their security profile.
According to First Mutual Holdings the capital raised will be utilised to capitalise FMRE Zimbabwe and FMRE Botswana to provide the businesses with adequate working capital to their enhance reinsurance capabilities, and to further boost the subsidiaries’ solvency, liquidity and other technical considerations to support expansion.
The increased capital base will allow FMRE to take advantage of the opportunities in the reinsurance space.
The transaction is however subject to further approval by regulators including the Reserve Bank of Zimbabwe, Competition and Tariff Commission, and Non-Bank Financial Institutions Regulatory Authority of Botswana (“NBFIRA”) and the Insurance and Pensions Commission of Zimbabwe (“IPEC”) among others.
Bongani Ndlovu