Britam Holdings has announced that it is reviewing a transaction that could result in the sale of all or a portion of its stake in HF Group, a Nairobi-based financial services group with interests in mortgage lending, corporate, and retail banking.
Britam is a diversified investment group and a leading insurer in East Africa.
Kenyan business leaders like Jimnah Mbaru, Peter Munga, James Mwangi, and Jane Wanjiru Michuki have significant shareholdings in the group.
In its 2021 annual report, the group classified its 48.2-percent stake in HF Group as held for sale, stating that it has hired a transaction advisor to engage potential buyers and other viable options within the current fiscal period.
“The directors approved the appointment of a transaction advisor to engage various interested parties with a viable option expected to be realized within the next twelve months,” the group stated.
The move represents a strategic turning point for the group, which is reorganizing its executive structure and reviewing its investments in financial services providers to diversify its portfolio and comply with regulatory guidelines limiting investments in a bank to 10 percent of an insurer’s total assets.
Britam’s latest disclosure comes four months after it completed the sale of a 6.7-percent stake in Kenya’s largest commercial bank Equity Group to the International Finance Corporation for Ksh14 billion ($121 million).
The management also stated that options for its stake in HF Group include reaching out to strategic partners who have the capacity to accelerate and support the process of turning HF Group around as it prepares to transition into mainstream banking.
These other options may assist Britam Group in realizing optimal value from its investment when compared to a full or partial divestment as it prepares to reduce its exposure to publicly traded companies. The position aligns with the group’s new strategy to minimize investment earnings volatility to the point where it has no impact on the group’s overall financial performance.
Since the start of the year, Britam’s shares have decreased in value by more than 20 percent, from Ksh7.5 ($0.063) to Ksh5.94 ($0.0498), resulting in losses of millions of dollars for Mbaru, Munga, Mwangi, and Michuki.