BPOPF moves to acquire Bramer Life
Brian Benza | Friday June 5, 2015 18:04
Information gathered by BusinessWeek reveals that negotiations are at an advanced stage for new investors to takeover Bramer Life after the insurance business, currently under statutory management, was shaken by a financial scandal at its Mauritian parent company.
The Non-Banking Financial Institution Regulatory Authority (NBIFRA) placed the insurance company under statutory management in April after its majority shareholder BAI Co was accused of being involved in a ‘Ponzi Scheme’.
This prompted authorities in the Indian Ocean island to place the company, which holds 80 percent in Bramer Life, under conservatorship.
According to industry sources, the private equity fund, which is managed by Capital Management Botswana (CMB), is eyeing a significant stake in Botswana’s newest insurance firm, while other smaller investors have also expressed intention to buy the Mauritian company’s equity.
“Other local investors are involved as well, but the BPOPF through CMB are the major prospective investors,” said the source who declined to be named. Statutory manager, Nigel Dixon-Warren of tax and consulting firm KPMG, declined to reveal much detail about the negotiations.
He, however, confirmed that a deal to rope in new shareholders is expected to be finalised by the middle of June, which would be followed by a rebranding of the company.
“We have managed to find new shareholders and negotiations are close to being concluded. Once the deal is signed, the rebranding of the company will follow. “A name change would be necessary since the company suffered negative publicity due to the alleged scandal in Mauritius. “The rebranded company has to build on the capacity it had already developed,” said Dixon-Warren. CMB director, Rhys Carr said he was not at liberty to discuss any of the company’s transactions.
According to the statutory manager, the ongoing negotiations also involve attempts to resolve a dispute over alleged unfulfilled investment obligations between Bramer Life and the BAI Co. Bramer Life has filed an intention to sue BAI Co at the High Court, but BusinessWeek understands the two parties are trying to solve the matter out of court.
BAI Co was supposed to have invested P40 million in Bramer Life when the company started operations about a year ago.
Although parties are now trying to solve matters out of court, officials at Bramer Life could not rule out going back to seek redress at the courts if the matter is not resolved amicably.
“The matter is a very complex one. The parties agreed that this issue would be resolved as part of the deal that we are working on,” said Dixon-Warren. Dixon-Warren also declined to divulge how much the new investors would inject into Bramer Life, but could only intimate that the amount is in the same ball-park as BAI co’s initial investment of P40 million.
Former BIHL boss, Regina Sikalesele-Vaka is the managing director of Bramer Life and is believed to own a significant stake of the remaining 20 percent in the local insurance company. CMB won a P500 million private equity tender from the Botswana Public Officer Pension Fund (BPOPF) last year.
Under the new fund called Botswana Opportunities Partnership (BOP), CMB seeks to invest into local businesses providing mostly growth capital. CMB was born out of BIFM Capital two years ago, when its promoters Timothy Marsland and Carr parted ways with former partners, BIHL.
The BOP looks to invest into Botswana companies that have potential to develop new products, create jobs and viable enough to create a blended rate of return of 20 percent across all the businesses.