Senior Business Reporter

First Mutual Holdings (FML) shareholders, have given a thumbs-up to a deal that will see the insurance group's two main units placed under a Botswana based holding company.

The approval of the restructuring means that the group's two wholly owned reinsurance businesses -- First Mutual Reinsurance Company Limited (FMRE Zimbabwe) and FMRE Property & Casualty (Proprietary) Limited (FMRE Botswana), which are incorporated under the laws of Zimbabwe and Botswana, respectively -- now fall under First Mutual Reinsurance Holdings (Proprietary) Limited (FMRE HoldCo), which will be domiciled in Botswana.

The transaction is by way of transfer of shares of the relevant subsidiaries with the ultimate beneficial ownership remaining unchanged.

"(The transaction as outlined in the circular to shareholders dated Monday the 14th of September 2020, resulting in the subscription by Aleyo Growth Fund I Partnership, approved for a 29,1 percent shareholding in First Mutual Reinsurance Holdings (Proprietary) Limited for BWP 61 million, which sum shall capitalise FMRE Property & Casualty (Proprietary) Limited and First Mutual Reinsurance Company Limited, be and is hereby approved," said the group this week.

The approval was guaranteed at an extraordinary general meeting held on October 5.

The restructuring comes after the acquisition by Botswana-based firm, Aleyo Capital, of a 29,1 percent shareholding in FMHL re-insurance business for circa US$5,3 million following a capital raising exercise.

The group hopes that the restructuring will contribute to a turn of fortune for the business.

First Mutual Holdings reported an underwhelming set of numbers for the six months to June 30, 2020, with Gross Written Premium (GPW) sliding 8 percent to $1,5 billion as most of its operations felt the weight of inflationary pressures.

However, rental income for the period improved by 45 percent to $65,8 million compared to prior year, attributable to quarterly rental reviews and increases in occupancy rates in retail and residential properties.

Over the same period, the group achieved investment income of $407 million for the period under review compared to investment income of $346 million in 2019, which was driven by fair value gains on listed equities.

Copyright The Herald. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English