(Ecofin Agency) – Proparco has positioned itself to invest $10 million in order to acquire a minority but significant stake in the capital of a company present in several African countries.
Proparco, the branch of the French Development Agency in charge of the private sector, is close to investing USD 10 million in equity, to become the first international institutional shareholder of the Mauritian insurer MUA, which is present in 6 African countries. .
« This investment marks the start of a key long-term partnership that will strengthen MUA’s financial capacity to improve insurance coverage and increase market share. “said the development finance institution in a press release.
Proparco is pleased to announce a proposed strategic equity investment of USD 10M in MUA Ltd, a regional insurer with operations in several countries in #Africa
➡️This partnership will strengthen MUA’s ability to improve insurance coverage in Africa: https://t.co/7lDZnkGFq8 pic.twitter.com/VaWjai1NP4
– Proparco (@Proparco) June 3, 2022
The stake acquired by Proparco will ultimately depend on the exchange value between the Mauritian rupees, the currency of the transaction, and the US dollar, the reference currency. But the basic scenario foresees that the French institution will become a 7.8% shareholder on the basis of current market conditions.
This investment is announced as MUA experienced a mixed first quarter of 2022. Its earned premiums rose 12%, but its net profit fell nearly 96%. According to data published by the insurance company, the solid performance of its subsidiaries in East Africa was negatively impacted by the decline in margins in Tunisia.
Proparco’s acquisition plan will have to be approved by the group’s more than 2,186 shareholders, but also by the regulatory authorities. MUA Insurance is also present on the Stock Exchange of Mauritius, the financial market of Mauritius.
Idriss Linen