NAIROBI, June 6 (Reuters) - Kenya’s capital markets regulator has approved a plan by diversified financial services company British American (Britam) to issue 5 billion shillings ($57.11 million) in bonds to fund expansion.
Insurance is seen as a growing industry in the region because of low levels of penetration. Only about 7 percent of the 40 million people in Kenya, east Africa’s biggest economy, have any form of insurance.
Britam, which has insurance, asset management and property development businesses, also has operations in Rwanda, Uganda and South Sudan.
It is in the process of concluding the acquisition of a 99 percent stake in fellow Kenyan company Real Insurance, which will give it access to Malawi, Mozambique and Tanzania.
“Britam expects to use the funds to support several strategic initiatives, including real estate opportunities, private equity opportunities, local and regional business growth and ICT investments,” the Capital Markets Authority (CMA) said.
The CMA said the bond will be issued in two parts, with the first for 3 billion shillings and the second for 2 billion shillings. It also granted Britam the option to sell a further 1 billion shillings of the paper if the first tranche is oversubscribed.
Britam posted a 12 percent rise in full-year 2013 pretax profit to 3.2 billion shillings. ($1 = 87.5500 Kenyan shillings) (Reporting by George Obulutsa; Editing by Drazen Jorgic and David Goodman)