Billionaire businessman Peter Munga has moved part of his Britam shares into a new investment vehicle, signalling a plan to either sell part of the stake or succession planning on his estate.
Latest shareholder filings contained in Britam’s 2023 annual report show that EH Venture Capital Kenya Limited, a firm in which he has a controlling stake, moved 173.27 million shares equivalent to a 6.87 percent stake last year to a new vehicle known as EHL 2022 Limited.
The transferred shares have a current market value of Sh984 million based on the insurer’s closing price of Sh5.68 yesterday.
At the beginning of 2023, EH Venture Capital Kenya held 405 million Britam shares, equivalent to 16.05 percent of the company’s total issued shares.
Following the partial transfer, the investment vehicle was left holding 231.73 million shares (9.18 percent). Filings at the Business Registration Service (BRS) show that EH 2022 Limited is registered under Mr Munga’s name.
The businessman did not immediately respond to calls and a text message request for comment.
Mr Munga was among a group of Britam founders who formed the nucleus of anchor shareholders at the time of the company’s listing in 2011.
His stake at the time amounted to 16 percent of the company, primarily held through Equity Holdings Limited, Filimbi Limited and in his own name.
At listing, Equity Holdings Limited—which has since then been renamed to EH Ventures Capital Kenya Ltd— held 405 million shares, but the ownership of the vehicle was split between Mr Munga (55.6 percent) and city lawyer Jane Wanjiru Michuki (44.4 percent).
Filimbi Ltd, meanwhile, held 90 million shares, which were split on a 50:50 basis between Mr Munga and Jane Wangui Njuguna, the wife of Equity Group chief executive James Mwangi. The shares held in Mr Munga’s name stood at 75 million units.
As at June 2023, the shares held under Filimbi had fallen to 18.92 million units, as a result of sales over the years.
In July 2016, Mr Munga temporarily took ownership of an additional 452.5 million Britam shares that were previously in the hands of the company’s former director and Mauritian national Dawood Rawat.
Mr Rawat’s shares were among his assets that had been seized by the Mauritius government after he was accused of running a $693 million (Sh90.6 billion at today’s exchange rate) Ponzi scheme in the island nation.
The Mauritian government put the shares on the market in order to recover part of the Sh9.9 billion it had paid in compensation to victims of Mr Rawat’s scheme.
Mr Munga bought the shares under an investment vehicle known as Plum LLP, saying that the move was intended to eliminate investor uncertainty arising from Mr Rawat’s troubles at the time.
He would later sell these shares in 2017 and 2018, although he never disclosed either the price at which he acquired them, or the selling price, making it hard to determine whether any benefit accrued to him as a result of the transactions.
He initially sold 104 million units in the open market in 2017, before offloading the remaining 348.5 million units to Zurich-based insurance firm Swiss Re the following year.
The Swiss firm later added to its stake by purchasing 50 million shares from Britam co-founder Jimnah Mbaru, raising the number of shares under its name to the present 398.5 million units.
The long-term Britam shareholders were also diluted in 2017 when the company issued new shares to the International Finance Corporation (IFC) and private equity firm AfricInvest and in 2017 and 2018, respectively, to raise Sh9.2 billion in new capital.
The IFC was issued 224.2 million shares at Sh15.85 a share in September 2017, valuing the deal at Sh3.55 billion, while AfricInvest took up 360.8 million shares in May 2018 at the same price as IFC. The PE firm later bought additional 82 million shares in the insurer in the open market in the second half of 2018, raising its stake to the 442 million shares that it holds to date.
The price erosion of the Britam stock from its listing price of Sh9 per share has also hurt the overall worth of the anchor shareholders.
By close of trading yesterday, Britam was trading at Sh5.68 a share, having not traded above the listing price since June 2020.
