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BK Group to issue shares in Rwandan insurers buyout
By using shares of BK General Insurance to pay for the acquisition, the transaction will have no impact on the cash position or ownership of the listed parent company.
Cross-listed Rwandese lender BK Group will see its general insurance subsidiary, issue shares to current owners of Sonarwa life and general insurance units in a merger deal valued at billions of Rwandan Francs.
The company, listed on Nairobi and Kigali stock exchanges, says the proposed buyout of the Sonarwa units, which also operate in Rwanda, will help it grow its business and capture life insurance premiums that it has been ceding to other providers.
By using shares of BK General Insurance to pay for the acquisition, the transaction will have no impact on the cash position or ownership of the listed parent company.
“This transaction involves a share swap that is relatively faster than a cash consideration. The transaction will not result in any change in the shareholding of BK Group,” said BK Group in a circular to shareholders.
“The driving factor of the deal is to create a home-grown champion, better positioned to deliver value to all stakeholders. BK Group will enjoy revenue streams from life assurance business, which it previously had to give away as it only had a general insurance license.”
The merged entity, as per disclosures in the circular, will have an equity value of Sh3.2 billion (RwF 35 billion), with the general insurance arm accounting for Sh2.7 billion and the life unit Sh504.6 million.
By opting for a share swap, BK Group is set to avoid injecting cash into the transaction, which frees up capital for potential investments to grow the business after the merger.
BK Group founded the insurance subsidiary in 2016, where it currently provides general coverage in motor, transport, engineering and personal accident to 22,900 active policyholders.
In 2024, BK General Insurance reported gross written premiums of Sh1.47 billion (16 billion Rwandan Francs), up from Sh1.35 billion (RwF 14.7 billion) in 2023. The company paid out Sh339.4 million (RwF 3.7 billion) in claims in the period.
Its net profit for the period rose by 41 percent to Sh412 million (RwF 4.5 billion), while total assets stood at Sh2.52 billion (RwF 27.5 billion) as at December 2024.
The larger BK Group reported a net profit of Sh8.5 billion in the year to December 2024, representing year-on-year growth of 21.7 percent. Its loan book stood at Sh133.4 billion, and customer deposits at Sh150.6 billion.
BK Group also operated a representative office in Nairobi for 12 years until April 2024, when it shut the office down in order to focus more on digital service delivery channels.
It cross-listed on the Nairobi Securities Exchange (NSE) in November 2018, becoming the second East African company to do so after Ugandan power distributor Umeme, which went live on the Nairobi bourse in December 2012.
BK Group is currently trading at Sh31.70 on the NSE, giving the lender a market capitalisation of Sh28.42 billion.
