JKH to sell Union Assurance General biz control to Canada’s Fairfax Asia
Friday, 1 August 2014 00:29
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Total non-life business valued at Rs. 4.5 b; JKH to divest 78% stake; UAL share price gain by Rs. 15
JKH says UAL will continue to retain ownership of the Life insurance business in its entirety
John Keells Holdings (JKH) has struck a deal to divest a 78% stake in Union Assurance Plc’s General business to Fairfax Asia Ltd.
The deal will be done following the completion of the segregation of the UAL’s General and Life insurance business under a scheme of arrangement.
The announcement saw UAL’s share price rise by Rs. 15 to close at Rs. 145 after it hit an intra-day high of Rs. 148.
Based on the projected financial statements of UAL as at 31 December 2014, and for the purpose of this transaction, the overall valuation of the General insurance business of UAL has been estimated at approximately Rs. 4.5 billion.
Fairfax is a wholly-owned subsidiary of Fairfax Financial Holdings Ltd., a Canadian financial services holding company, which through its subsidiaries is engaged in property and casualty insurance and reinsurance and investment management.
JKH and UAL said the transaction is subject to customary closing conditions including the successful completion of due diligence along with regulatory and court approvals and is expected to close by the first quarter of 2015.
JKH said UAL will continue to retain ownership of the Life insurance business in its entirety.
JKH holds a 88.25% stake in UAL and via Whittall Boustead Ltd., a further 7.4%
UAL’s General Business had Rs. 5.4 billion in Gross Written Premium by end 2013, up 17% from Rs. 4.6 billion in 2012. Net earned premium was Rs. 4 billion, up from Rs. 3.5 billion in 2012.
General business’ profit for 2013 was Rs. 332.4 million, down 14% as against Rs. 388 million in the previous year, which was a record.
UAL’s Life business’s GWP in 2013 was Rs. 5.5 billion, up 8% from Rs. 5.1 billion in 2012. Profit from this segment was Rs. 790 million up 48% from Rs. 533 million in 2012.
Overall UAL in 2013 posted a net profit of Rs. 1.1 billion, up 22% from 2012.
