Nico Holdings closes in on General insurance deal
Financial services group, Nico Holdings Limited, is close to clinching a deal for one of its subsidiaries and has indicated that “definitive transactional agreements are still being negotiated”.
The Malawi Stock Exchange (MSE)-listed group has since 2010 been involved in negotiations with a strategic equity partner for its wholly-owned general insurance business.
In August 2012, the group which has interests in the banking, insurance and technology and asset management, announced that it had found a partner and accepted the offer.
But in a cautionary statement issued on Tuesday, company secretary Emily Makuta said: “The transaction is expected to be completed once all conditions precedent are fulfilled.”
She has since advised the public and shareholders to continue to exercise caution when dealing with Nico Holdings shares, currently trading at K15.15 per share, until a full announcement is made.
Nico Holdings managing director Felix Mlusu was not immediately available for comment on the significance of the partnership in general insurance business.
But in an earlier interview, he offered an explanation on why the group, that has spread its tentacles regionally, is keen on partnering with strategic equity partners.
“Our businesses have matured and the need to have strategic partners is to enable us to take those businesses to another level. Through these strategic partnerships, we believe we can leverage the synergies which these smart partnerships create,” said Mlusu.
In 2011, the group concluded a deal with International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, which bought a 16.51 percent stake in MSE-listed NBS Bank and invested $10 million (K3.8 billion, at the current exchange rate) .
The year before, the group also concluded deals on two of its subsidiaries Nico Life Insurance Company Limited and Nico Technologies Limited.
South Africa-based Sanlam Development Market (SDM), a subsidiary of Sanlam Life, bought 49 percent stake in Nico Life Insurance Company while Nihilent Technologies of India bought a 25.1 percent stake in Nico Technologies with an option to acquire a further 25.9 percent stake in the company.
Nico Holdings has subsidiaries in Mozambique trading as Nico Mozambique Vida Companhia De Seguros, in Zambia as Nico Insurance Zambia Limited, Tanzania as Niko Insurance Tanzania Limited and in Uganda as Nico Insurance Uganda Limited.
The group, in early 2010, also acquired a 49 percent stake in Standard Fire Group (SFG) Holdings (Private) Limited, a general insurance firm in Zimbabwe at $1.3 million (K503 million).
Nico Holdings was the first company to list on the MSE in 1996.
