Britam Group Managing director Benson Wairegi (left) and board chairman Francis Muthaura during the firm's Annual general meeting. [Photo / Business Daily. ]
Britam insurance firm has received a go ahead to sell 360,888,281 million new ordinary shares at a subscription rate of Sh15.85 per share to a private equity firm, AfricInvest.
The sale through the subscription of shares will increase the shareholders’ fund by Sh5.7 billion for a 14.3 per cent stake.
According to Britam's Holdings Chair Andrew Hollas, the private equity firm has been informed of the company’s decision to raise equity to sustain its growth strategy and will thus be entitled to one position in the Britam's Holdings Board.
Hollas added that the firm will be entitled to dividends that will be paid by June next year for the fiscal year ending December 2017 if the transaction process is completed on or before November 30.
“If the subscription is completed after November 30, AfricInvest will only be entitled to dividend that is declared in excess of Sh0.40 per share in respect to the year ended December 2017,” read part of the agreement.
Shareholders however questioned the dividend payment plan saying that the huge amount of money pumped to the firm will not have yielded any returns by next year, but Britam's Managing Director Benson Wairegi said that the scenario is ‘not unusual.’
The latest investments by AfricInvest comes just months after World Bank’s International Finance Corporation (IFC) in March purchased 224.1 million shares representing 10.37 per cent of total shares.
Britam was able to raise Sh3.5 billion in the deal with IFC.
Wairegi also noted that they have been able to raise el Sh9 billion for their 2016-2020 strategic plan and thus will not need for shareholders' to approve another investment as they will now shift their focus to developing their businesses ranging from properties to insurance.