FMHL's RTG equity sale to boost its core assets

FMHL's RTG equity sale to boost its core assets
Published: 02 October 2017
First Mutual Holdings Limited says the completion of the disposal of its 19,95 percent shareholding in Rainbow Tourism Group (RTG) to the National Social Security Authority (NSSA) will help the insurance group expand its investment portfolio.

The funds will also be used to meet the set regulatory capital for its subsidiaries In a statement to shareholders, FMHL said the sale will use the funds to further ‘diversify' its portfolio, while at the same time boosting regulatory minimum capital for its subsidiaries.

"The disposal will provide a number of benefits to FMHL, including diversification of its investment portfolio as well as increasing admissible regulatory capital for the group's insurance subsidiaries, as the sale proceed will be applied to prescribed assets," said FHML.

The insurance group's subsidiaries include First Mutual Wealth, First Mutual Health, Pearl Properties, First Mutual Life and Tristar Insurance, and was prompted into the sale after insurance regulator, the Insurance and Pensions Commission (IPEC) issued a corrective order to the group to focus on its key business.

It is expected that FMHL will yield around $3, 5 million from the RTG stake sale. The 19, 95 percent equity (or 373 289 666 shares) will be sold at a price of US$0, 009275 per share.

"The transaction will be settled in the normal way," said FMHL.

Prior to the deal NSSA was already the major shareholder in RTG with a 40 percent stake.
- bh24
Tags: FML,

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