Regent to buy Zambian insurance firm

Pauline Dikuelo | Friday May 8, 2015 15:20

The disposal by Blue comes as part of the restructuring process that was announced last month and it is expected to help the group divest from non-core investment despite BAS Zambia being the only long term insurance licence holder in the group.

The core business of Blue, which operates in 12 African countries, is microfinance. 

According to a statement issued on Monday, BFS in Zambia and Blue Employee Benefits Botswana, the wholly owned subsidiaries of Blue have entered into a sale agreement with Regent Life Botswana to dispose of 100% in Blue Assurance Services (BAS) which is supposed to be settled in cash once the transaction date has been set. The agreement was subject to the approval of  the Pensions and Insurance Authority in Zambia. Through the disposal, BFS Zambia and indirectly, the company’s obligation to inject capital to meet the minimum capital requirements will be reduced by 50 percent.

Prior to the sale of shares to Regent Botswana, last week BFS Zambia was supposed to contribute about 50 percent of the total amount required to restore the negative Net Asset Value (NAV) by subscribing for shares in the issued share capital of BAS Zambia.

“The shares subscribed for BAS Zambia will be sold to Regent Botswana as part of the transaction, in which is anticipated that the NAV shortfall will be approximately ZAR833 thousand, to be contributed on an equal basis by BAS Zambia and Regent Botswana.

“As part of its 50 percent contribution, BFS Zambia will subscribe for 250 000 shares at a total subscription price of ZAR416 thousand. If it transpires that the NAV shortfall at the effective date is more than ZAR833 thousand the subscription price will be deemed to have increased proportionally and BFS Zambia will settle its equal contribution to the NAV shortfall of BAS Zambia in cash,” reads the statement.