Britam, Real complete deal

Real Insurance Company of Malawi Limited and British-American Investment Company (Britam) have concluded an acquisition transaction a deal that promises better financial services to consumers.

Britam early this year approved the acquisition of Real Insurance Kenya—a company that holds 65 percent of shares in the Malawi Stock Exchange (MSE)—listed Real Insurance Company of Malawi Limited—through a purchase of about 14.9 million shares.

Real Insurance  head office in Blantyre
Real Insurance head office in Blantyre

As a result of the deal, Britam was set to partner with Real Insurance Company of Malawi Limited.

Real Insurance said in a statement that all conditions precedent to the fulfillment of the transaction have been completed and effective August 1, the company is a subsidiary of the Britam Group.

Analysts have, so far, upheld the deal, arguing it will improve financial services provided by the local company.

The company said the successful completion of the transaction has resulted in the creation of a large Pan-African insurance group with presence in seven countries, including Kenya, Uganda, Tanzania, Rwanda South Sudan and Mozambique.

Speaking after the sixth annual general meeting (AGM) Real Insurance Company of Malawi Limited acting board chairperson Joe Muchekehu said the strategic partnership will boost the local company’s performance.

Since the announcement of the acquisition, Real Insurance share price has jumped from K1.15 in April to K1.32 per share on the MSE last week.

Real listed on the MSE in 2008 and has not declared dividends regardless of its outstanding performance in 2013.

During the AGM, Muchekehu said that regardless of Real Insurance Malawi’s good performance in 2013, they could not declare dividends because they had not yet wiped all cumulative losses.

He said according to regulations, they would only be allowed to pay dividends once the losses have been wiped out.

The company’s chief executive officer, Grant Mwenechanya, briefing shareholders on the status of the company said they have performed well during this year’s first five months up to May and hoped to pay an interim dividend this year.

In 2013, according to the chairman’s report, the company registered a growth rate of 59 percent since being listed on the MSE with written premiums of K2 billion against K1.3 billion in 2012.

According to the 2013 annual report, the company’s pre-tax profits jumped to K242 million from pre-tax loss of K157 million.

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