Kenya Re stake in ATI set for dilution
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Kenya Re has bought a minority stake in Africa Trade Insurance Agency (ATI), securing an additional revenue stream from the fast-growing continental underwriter.
The Nairobi Securities Exchange-listed firm last month invested $1 million (Sh87.5 million) in ATI, taking a 0.55 per cent stake in the multinational that covers political and trade risks.
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Nairobi-based African Trade Insurance (ATI) is raising of $69.1 million (Sh6.9 billion) from five new member countries that will be issued with shares amounting to a combined 18.72 percent stake in the company.
The underwriter has already received Sh1.4 billion and Sh1.7 billion from Nigeria and Ghana respectively. Nigeria acquired a 3.8 percent stake in the transaction while Ghana secured a 4.78 percent equity.
Niger, Togo and Cameroon will each invest Sh1.2 billion in ATI by March 2020 and will each receive a stake of 3.38 percent.
Besides raising capital from new member states, the insurer also recently sold a 3.5 percent stake to Swiss insurance firm Chubb for Sh1 billion as part of its efforts to strengthen its balance sheet.
“These new shareholdings, combined with a solid performance and steady growth, are expected to bring ATI’s equity to a level exceeding $400 million (Sh40.4 billion) in 2020,” ATI said in a statement.
The entry of new shareholders is set to dilute earlier investors including Kenya which has been the top investor with a stake of 10.36 percent.
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