By BK Group Plc said on Monday it had completed the sale of its entire stake in BK General Insurance Ltd to the Rwanda Social Security Board for 31.7 billion Rwandan francs ($22 million), as the Kigali-listed lender narrows its focus to banking and investment services.
The Kigali-based financial group, which trades on the Rwanda Stock Exchange and is cross-listed on the Nairobi Securities Exchange, said in a statement that the sale covered all 3 million ordinary shares of BK General Insurance, at a price of 10,567 Rwandan francs per share.
That valuation is more than ten times the shares’ initial issue price of 1,000 francs each, BK Group said, adding that the pricing was based on an independent valuation.
BK Group also confirmed the integration of BK Techouse Ltd, its technology subsidiary, into Bank of Kigali Plc, its commercial banking arm. The company said BK Techouse had ceased to operate as a separate Group subsidiary, with its assets, technology platforms and contracts transferred to the bank.
Technology functions previously carried out by BK Techouse will now sit within Bank of Kigali’s Digital division, the statement said, adding that the change would not disrupt customer services.
BK Group said the two transactions reflect a consolidation strategy under which the Group is concentrating on two core businesses: commercial banking through Bank of Kigali and investment banking through BK Capital Ltd.
“In line with BK Group’s consolidation strategy, the Group is focusing on two core operating businesses: commercial banking, through Bank of Kigali Plc and investment banking, through BK Capital Ltd, with emphasis on product diversification, market expansion, cross-collaboration synergies and a strengthened capital markets offering,” the company said in the statement.
The notice was signed by Dr. Uzziel Ndagijimana, BK Group’s Group Chief Executive Officer.
The disclosure was made under the Issuer’s Continuing Obligations set out in the Rwanda Stock Exchange Rule Book 2013 and the East African Community Council of Ministers’ Directive on Regional Listings in the Securities Market, as well as the Nairobi Securities Exchange Listing Rules.
BK Group said the notification was addressed to the Rwanda Stock Exchange, the Nairobi Securities Exchange, the Capital Market Authority of Rwanda and the Capital Markets Authority of Kenya, along with the wider investment community.
The company said both transactions had met all applicable regulatory requirements and had received non-objections from the National Bank of Rwanda, the country’s central bank and financial regulator.
BK General Insurance was fully owned by BK Group prior to the sale. Under the agreement, the Rwanda Social Security Board — the country’s public pension and social security institution — becomes the sole shareholder of the insurer.
Regarding BK Techouse, BK Group said proceeds from the technology unit’s transaction would allow it to settle all outstanding liabilities. Any surplus funds remaining after settlement will be transferred to BK Group at the closure of the company, the statement said.
BK Group said the transaction would have no effect on the Group’s consolidated net asset value, indicating the changes were structured to be neutral to the parent company’s overall balance sheet.
BK Group is one of the largest financial services groups listed on the Rwanda Stock Exchange, with its shares also cross-listed on the Nairobi Securities Exchange in neighboring Kenya. Its flagship subsidiary, Bank of Kigali, is one of Rwanda’s largest commercial banks by assets.
The Group has in recent years pursued a strategy of diversifying and later consolidating its business lines across banking, insurance, technology and investment services, as regional financial groups in East Africa seek to streamline operations and sharpen their competitive focus amid growing cross-border listing activity.
