Eyes on London as Old Mutual plots Africa break-up

10.03.2016

Eyes will be cast on London Friday to see the future of Old Mutual Kenya as stakeholders meet to unveil a strategic review.

The London and Johannesburg-listed financial group is plotting a break-up, which could trigger a takeover battle for its various operations.

Dismal performance in African markets last year with dampened economic outlook has shaken companies cross listed on the continent.

Currency rout and a bear-run at bourses especially in South Africa has hit global players who now want to limit exposures by cutting down their stakes.

UK’s Barclays PLC has led the exodus announcing plans to offload its 62.3 per cent stake in Barclays Africa, which in-turn has a controlling stake in Barclays Kenya.

This comes even as its latest acquisition UAP admitted that the challenging regional environment had eaten into its bottom line last year bringing down its profit after tax to Sh896 million down from Sh1.6 billion in 2014.

INTEGRATION

The group hopes to complete the integration of Old Mutual and UAP businesses in Kenya following the Old Mutual’s acquisition of a controlling stake in the company.
“The group’s profitability was impacted by the unfavourable macro-economic environment which was characterised by volatile exchange rates and challenging performance of its investments listed at the Nairobi Securities Exchange,” UAP said in a brief to investors.

The East and Central African financial services company, said in its financial filings that it however managed to shake off currency losses and interest rates adjustments by central banks to grow premiums by 14 per cent.

UAP which was acquired by UK-based financial services group Old Mutual last year posted a Sh16 .8 billion in gross written premiums up from Sh14.8 billion during the same period in the previous year.
The 2015 investment performance was impacted by the challenging business environment within the East Africa Region which was largely attributable to an increase in interest rates and significant strengthening of the dollar against local currencies.