Swedfund Sells Stake in Insurance Company, Makes Capital Gain of SEK 160 Million

Sweden's Development Finance Institution, Swedfund, is selling its stake in the Kenyan insurance company UAP. The sale, to insurance group Old Mutual, entails a capital gain exceeding SEK 160 million for Swedfund.

”In only three years we have succeeded in achieving Swedfund’s primary targets for the business. We have realized substantial value, created employment opportunities and fair employment conditions,” states Anna Ryott, MD at Swedfund.

”Through the investment in UAP we have had the opportunity to support the firm in its expansion through Rwanda, Tanzania and DRC countries where the need to develop insurance markets is big. We have cooperated closely with UAP management in order to drive matters of business strategy as well as important sustainability issues, for example fair employment conditions and anti-corruption measures. It is gratifying to see how this effort has resulted in a substantial increase of the value of the company while simultaneously contributing to social development,” says Anna Ryott, CEO at Swedfund International AB.

Swedfund initially invested in the region of 70 MSEK in UAP at the beginning of 2012 *1, *2 and at the end of year three Swedfund is now selling its entire stake to Old Mutual *3. The premise for the sale is the increase in the value of Swedfund’s investment from 70 MSEK to 237 MSEK in only three years. These are funds that can now be used for new investments in the region. For Old Mutual the acquisition means a majority stake in UAP as a result of earlier stock acquisitions in the company. The completion of the deal requires for Old Mutual to fulfill all regulatory stipulations.

At the time of Swedfund’s investment in 2012, UAP was a regional insurance company present in Kenya, Uganda and South Sudan. Utilizing Swedfund’s capital the UAP has entered Rwanda, Tanzania and the DRC with swift business growth -today UAP has more than 650 000 customers. In 2013 UAP’s earnings before tax exceeded 200 MSEK with turnover of over 1 billion SEK. UAP has around 550 employees and now conducts its business in accordance with the conventions of the ILO. This was one of the conditions laid forth at the initial investment to guarantee fair employment conditions for all employees. Swedfund invested in UAP because stable and reliable insurance companies and banks are necessary to drive development in the regions and countries where Swedfund invests. Insurance offers added security and stability for the private sector which in turn has a positive influence on social development and the investment climate. “Insurance companies’ investment portfolios also increase the liquidity and efficiency of the financial system,” says Jonas Armtoft, responsible for Swedfund’s investment in UAP.

A sale to Old Mutual is positive for UAP because of the preconditions the two companies have to form a leading financial actor on the African market.

For further information, please contact:
MD: anna.ryott@swedfund.se
or Director of Communications:kai.sundstrom@swedfund.se

*1.UAP is an insurance company whose markets include Kenya and Uganda.
*2. UAP Holdings Limited
*3. Old Mutual offers investment, insurance and banking services to more than 16 million clients across several continents. OM was established in South Africa in 1845 and is listed, among others, on the stock exchanges of London and Johannesburg since 1999.