PRESS RELEASE
TA HOLDINGS acquires 59PC stake in Botswana company
Business Reporter - The Herald(Wednesday 5 November, 2003)
TA Holdings had acquired a 59,38 percent stake in Botswana Insurance Company Limited (BICL) through Trans-Industries (Pty) Limited Botswana (TIL), a company in which TA Limited has a beneficial interest.
BICL is the largest short-term property and casualty insurance company operating within Botswana and prior to this transaction, it was owned by St Paul Multinational Holdings Inc. which divested from the company to pursue other interests.
Botswana shareholders will hold the balance of 30 percent in the company.
Zimnat Lion, a listed company on the Zimbabwe Stock Exchange in which TA holds 54,63 percent shareholding, will manage BICL and earn management fees on gross written premiums of BICL while TA’s non-Zimbabwean balance sheet will be significantly improved by this transaction.
TA said the deal was necessitated by its continuos zeal to seek optimal ways of leveraging their current competencies and balance sheet to grow earnings and cash flows, through the identification of superior opportunities.
Through various business relationships, TA has in the past successfully expanded its hospitality investments and operations into the region which saw one of its arms, Cresta Hospitality spreading its wings into the Ugandan and Botswana markets.
Other pros to the acquisition of the insurance company hails from BICL’s excellent reputation and long history of profitability and it has cash slow that are adequate to cover debt interest costs while still possessing the potential to yield superior returns for shareholders in the future.
The funding structure of the deal, which involves bank loans and shareholder loans secured by the ordinary shares of BICL, makes it lucrative for TIL to participate and end up being the controlling shareholder of BICL.
TA recently withdrew its bid to acquire a 23 percent stake in Intermarket Holdings following undue delays by the regulatory authorities to endorse the deal.
TA said the deal had hit a brickwall as the Ministry of Finance and Economic Development and the commissioner of insurance were still to sanction the deal, expected to have been sealed by June 30 this year.