NAIROBI, June 28, 2011: American Investments Company (Kenya) Limited the holding company of British-American Insurance Company (Kenya) Limited, British-American Asset Managers Limited and Britam Insurance Company (Uganda) Limited has received approval from the Capital Markets Authority (CMA) to raise Ksh5.85 Billion from the capital market through an Initial Public Offering of its shares.

Effectively, the company will now be floating 650,000,000 new ordinary shares at an offer of Ksh9 (nine) per share.

Making the announcement, British-American Group Managing Director Mr. Benson Wairegi said; “this public offer and the subsequent listing of our shares is one of the greatest milestones in the long history of our Company in Kenya. We have been an influential and innovative presence in this market since 1965. Our performance has been characterised by steady, prudent and profitable growth focused on wide geographical coverage and a strong belief in local management. This offer will give Kenyans an opportunity to own a piece of the company they have supported tremendously for the last 46 years”.

“We believe the offer price of Ksh9 is affordable and will appeal to many investors.  Whilst the Group is already over 60% owned by Kenyan investors, this IPO will reinforce its position as a truly Kenyan financial institution.  I therefore invite you to join us as a shareholder of this great company,” Mr. Wairegi said.  

This IPO will give British-American an opportunity to increase the scope of its operations and widen its footprint.  Having recently opened operations in Uganda, the company’s strategic intent is to spread its wings even further to the rest of Eastern Africa and the next step will be to open offices in Tanzania, Rwanda and Southern Sudan.

In addition to regional expansion, the company is also keen to take advantage of emerging opportunities through innovative products and distribution channels such as microinsurance and bancassurance.  Mr. Wairegi added, “We seek to fundamentally redefine the scale and scope of the insurance sector in Kenya and the wider region.  We will tap the economic potential nascent in the newly created counties by building on our core distribution strengths, in particular our sales force presently one thousand strong and intended to be expanded considerably further.  Our established model of scale, reach and multi-layered selling will also be extended to the retail market and SMEs in the wider geographical region.”   

Today, insurance penetration in Kenya is dismal, with combined general and life insurance having a penetration of only 2.84 per cent of GDP. “This IPO presents a huge opportunity for British-American to grow organically and give handsome returns on investment.” Mr. Wairegi said.

Building on past property development successes, British-American plans to invest on a much broader scale in land and large scale development, including both commercial buildings and affordable housing.

To sensitize the market on the forthcoming IPO, the company has launched a series of educational activities across the country targeting key stakeholders and local investors. The road-shows will also be conducted in South Africa, Uganda and The United Kingdom targeting both Kenyans in the diaspora and international investors.

The IPO comes against the backdrop of a bullish outlook for the company following the announcement of a massive leap in profitability in 2010 despite economic uncertainties during the year. The group’s gross profit rose to Ksh2.87 billion in 2010, up from a loss of Ksh334 million recorded in 2009.  

Total Assets increased to Ksh25 billion, up from Ksh16 billion, representing 55 percentage growth, as Assets Under Management for the asset management subsidiary rose by more than 100 percent to Ksh17.3 billion up from Ksh8.4 billion registered in the year 2009.   Total Assets managed by the Group grew from Ksh25.0 billion as at 31 December 2009 to Ksh43.0 billion as at 31 December 2010.

The offer opens on 12thJuly 2011 and closes on 5thAugust 2011.

Mr. Wairegi thanked the Capital Markets Authority and the Nairobi Stock Exchange for their continued support.

About British-America Investments Company (Kenya) Limited:

British-American is a leading financial services group incorporated in Kenya under the Companies Act as a private limited liability company, and is domiciled in Kenya. Its largest shareholder is the British-American Investment Co. (Mauritius) Ltd, a financial services company with presence in the UK, Mauritius, Malta and Kenya.

British-American is the holding company of British-American Insurance Company (Kenya) Limited, British-American Asset Managers Limited and Britam Insurance Company (Uganda) Limited.

The Group offers a wide range of products to individuals, small businesses, corporations and government entities. The range of products includes life insurance, pensions, health insurance, and general insurance offered through its insurance arm of the business, while financial solutions which include, unit trusts, investment planning, wealth management, off-shore investments, retirement planning and discretionary portfolio management are offered through its asset management business. In addition, the company also carries out property development.

Britam Insurance Company (Uganda) Limited, underwrites both general and life insurance.

The Group also owns strategic stakes of 11.05 % and 16.56% in Equity Bank Limited and Housing Finance respectively.

The ownership:

British-American (Kenya) Holdings Limited, a global financial services company with offices in London, Mauritius, Malta and Kenya owns 30.17 percent of British-American. The rest of the shares are owned by local investors including:

The Business:

British-American Insurance Company (Kenya) Ltd. began in 1920, when the British-American Company (Kenya) Limited was incorporated in Nassau, NP Bahamas. After establishing its insurance foundations in the Bahamas, the company adopted a strategy in the post-war years to expand internationally focusing on British Commonwealth territories and set its sights on Africa during the nineteen sixties.

British-American Insurance Company (Kenya) Ltd. commenced operations in Kenya in 1965 when the first branch office was opened in Nairobi. A local company was incorporated in 1979 following a government directive that all branches of foreign owned insurance companies should be incorporated locally. The insurance company has evolved from a home service based company to its current status as a leading composite insurer providing all classes of insurance. In 1997 the foreign held equity was acquired by British-American Insurance Co. (Mtius) Ltd as part of a regionalization strategy of the British-American group.
In 2004 there was a share swap whereby the ownership of British-American Insurance Company (Kenya) Ltd. moved to British-American Investments Company. British-American Investments Company (Kenya) Ltd. in turn established British-American Asset Managers Ltd. After the successful launch of British-American Asset Managers, the group reorganized its structure. The new organization structure came into place in January 2007.

The company is organized into two main divisions, short term (or general) insurance business and long term assurance business, comprising life assurance and investment management. Long term assurance business relates to the underwriting of risks relating to death of an insured person, and includes contracts subject to the payment of premiums for a term dependent on the termination or continuance of the life of an insured person. General insurance business relates to all other categories of insurance business written by the company, analysed into several sub-classes of business based on the nature of the assumed risks.
 
British-American Asset Managers Ltd was established in 2004 to offer asset management and investment advisory services to individuals and institutional clients and address a growing need for innovative investment products and services. British-American Asset Managers Ltd is licensed as a Fund Manager by the Capital Markets Authority (CMA) and the Retirement Benefits Authority (RBA).

Britam Insurance Company (Uganda) Limited was incorporated in July 2010 and commenced operations in November 2010.  It underwrites both general and life insurance.

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