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Britam Holdings to Sell HF Stake

Britam Holdings is looking forward to sell part of its 48.2 % stake in mortgage financier HF Group  to one of the country’s big banks as part of a review of its investment portfolio.

Last week,the insurance company announced a new executive team that is expected to deliver enhanced service to its customers and position the company for long-term growth. After dropping 9 executive positions in the new structure,the executive is now made up of 11 members.

“Our new leadership team, which comprises a mix of talent from within the business and injection of new Executives, will go a long way in enhancing our customer focus and Pan-African ambitions. Our team’s diverse talents will also be leveraged to deliver new market solutions that will accelerate the company’s growth in the medium to long term,” said  Tavaziva Madzinga Britam’s CEO

Britam’s HF Sellout

Britam is planning to have one of the big banks acquire a majority stake in HF and run it. However, it will still retain a small stake in HF as a passive investor like it does in Equity Group.

The partial exit from HF is to allow the company to focus on its core insurance business.

The insurance group invested more than kes 5 billion to acquire the HF stake through several transactions, including the buyout of Equity Group’s 24.7 percent% ownership in the mortgage lender in 2014 for kes 2.8 billion.  However, HF’s share price has fallen to  Kes 3.48, placing its market capitalisation at Kes 1.34 billion and valuing Britam’s stake at kes 646 million, a Kes 2.15 billion loss.

In the mean time, Britam will continue to support the mortgage financier as the process of engaging new strategic investors continues.

Earlier this year, HF received kes 1 billion from the insurance company which was its top shareholder. The capital allocation was to enable HF to develop  its strategy of expanding into mainstream banking including retail and SME lending while cutting reliance on the soft real estate market.

 

“HF Group Plc is a strategic partner of the group, providing access to new customers and distribution channels for the insurance business and experience in property development,” Britam in its past annual report.

Following Britam’s announcement, HF share price has gone up 9.94% to kes 3.76 which analyst say could be the silver lining for the mortgage company.

The price at which the insurer and other small shareholders will sell their stakes in the impending transaction is still up for negotiations with investors.