BUSINESS REPORTER
First Mutual Holdings Limited (FMHL) is set to raise about US$5.3m to recapitalise its reinsurance units by selling a 29.1% stake to a Botswana-based investment management firm, Aleyo Capital.
The transaction requires approval from shareholders at an extraordinary general meeting and the nod from regulators in Zimbabwe and Botswana, according to a draft circular to shareholders seen by Business Times.
It will result in the creation of a holding company First Mutual Reinsurance Holdings (Proprietary) Limited (FMRE HoldCo) for FMHL’s reinsurance units— First Mutual Reinsurance Company Limited (FMRE Zimbabwe) and FMRE Property & Casualty (Proprietary) Limited (FMRE Botswana)—will be domiciled in Botswana.
Aleyo will buy a stake in the holding company through its investment vehicle, Aleyo Growth Fund I Partnership, for BWP61m (about US$5.3m).
The capital raised will be utilised to capitalise FMRE Zimbabwe and FMRE Botswana, and to further boost the subsidiaries’ solvency, liquidity and other technical considerations to support expansion.
FMRE Zimbabwe is involved in the provision of reinsurance services for all classes of general insurance and life and health insurance, with a stable credit rating of BBB issued by GCR Ratings.
It trades on a strong retrocession panel with ‘A’ rated regional and international retrocessionaires.
The territorial scope for the company is predominantly Zimbabwe with interests in selected African countries in pursuit of the vision to be the major reinsurance company in Africa.
FMRE Botswana is a Botswana based reinsurance company and one of the most noticeable regional reinsurers in East and Southern Africa. Besides the traditional segments of reinsurance, the company has a clear orientation towards underwriting of specialty lines of reinsurance in its selected markets.
As part of its market development, the company consistently leverages its expert knowledge and partnership with leading international underwriters to provide insights in risk management and technical training across Africa.
The company’s growth in Botswana and the region is linked to the development of customer focused insurance products for emerging risks like cyber, liabilities and agricultural risks Aleyo Capital is a Botswanabased investment management firm, specialising in private equity and mezzanine investments in Southern Africa.
The firm is co-founded and led by two partners and an investment team with significant experience in private equity investing and operating businesses in Botswana and the subSaharan Africa region.
The firm invests in high growth, market-leading businesses with potential to generate superior returns for investors.
Aleyo Capital team launched the Aleyo Growth Fund I in 2017 and has to date achieved a successful first close with a total commitment of BWP 500m (about US$43.3m) in August 2018.
The fund is targeting to close at BWP 750m (about US$65m) worth of commitments. Aleyo Capital is a member of the Southern African Venture Capital and Private Equity Association, Business Botswana as well as signatory of the United Nations Principles of Responsible Investing.
