Conduit Capital to offload insurance business
The sale of Constantia Risk and Insurance to Namibian group Trustco is expected to be completed by March
Investment holding company Conduit Capital has reached an agreement to sell its insurance business to Namibian financial services group Trustco for R2bn in a move to improve its financial position.
The transaction would enable Conduit shareholders to benefit from an investment in a larger and diversified financial services company with operations in SA, Namibia and other international markets, Conduit said on Monday.
Conduit Capital said the sale of its insurance business, Constantia Risk and Insurance, to Trustco’s subsidiary Legal Shielding Holdings (LSH) would bolster its balance sheet.
Conduit Capital will take a 16.1% stake in LSH, whose assets are valued at 5.8-billion Namibian dollars (R5.8bn). The sale was expected to be implemented by end-March 2020, the company said.
“The combination of Constantia with LSH will allow Constantia to benefit from a larger balance sheet which will unlock growth and value-creation opportunities in the South African, Namibian and other international insurance markets,” the company said.
LSH, which has a client base of 280,000, owns more than 4,000ha of real estate in Namibia.
Trustco said in a statement its plan was to use LSH to expand its insurance business in Southern Africa.
“Significant synergies exist between the two businesses in that Constantia services traditional insurance markets in SA while LSH services the micro insurance market in Namibia, and there are opportunities for the businesses to leverage off each other’s respective skills and to create cross-selling opportunities,” Trustco said.
Constantia, Conduit’s wholly owned subsidiary, offers insurance and risk management solutions, covering areas such as medical malpractice, primary health insurance and medical gap cover products and funeral and life insurance.
Conduit CEO Sean Riskowitz said the R2bn purchase price would be settled by LSH issuing 231,857 shares to Conduit. The shares are valued at 8,626.02 Namibian dollars.