Jubilee board chairman Nizar Juma. FILE PHOTO | NMG Jubilee Holdings has booked a gain of Sh2 billion from the sale of a 66 percent stake in its former subsidiary Jubilee General Insurance Limited to Munich-based multinational Allianz.
The company received Sh3.7 billion in the transaction, one of several that will be concluded towards the end of the year.
Jubilee’s chairman Nizar Juma told Business Daily that the company’s gain from the deal will likely rise to Sh3 billion by the end of the year.
“What we have booked in this first transaction in the half year is Sh2 billion but we estimate it will increase to Sh3 billion when everything is concluded,” Mr Juma said.
Jubilee retains a 34 percent stake in the company, now an associate, and which has been renamed to Jubilee Allianz General Insurance Limited.
The gain helped the Nairobi Securities Exchange-listed firm to more than double its net earnings to Sh4.5 billion in the half year ended June from Sh1.8 billion a year earlier.
“This significant jump was partly due to the gain of Sh2 billion from the sale of 66 percent of its Kenyan general insurance business to the Allianz group on May 4, 2021,” Jubilee said in a statement.
The insurer declared an interim dividend of Sh1 per share to be paid on October 11 to shareholders who will be on the register as of September 10.
Besides the gain, the insurer also benefitted from higher premiums and investment income from its portfolio spread across government bonds, real estate, fixed bank deposits, listed equities and private equity.
The company signed an agreement to sell stakes ranging from 51 percent to Sh66 percent in its general insurance subsidiaries in Kenya, Tanzania, Uganda, Burundi and Mauritius for a total of Sh10.8 billion.
Jubilee will receive a total of Sh7.75 billion in the deals with Allianz while Sh3 billion will be invested in the operating businesses in Kenya, Uganda, Tanzania, Burundi and Mauritius.Allianz and Jubilee said they will continue to work together to finalise the acquisitions for the businesses in Tanzania, Uganda, Burundi and Mauritius. Jubilee says that retaining minority stakes in the general insurance businesses will give it exposure to their future growth opportunities.
