Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG), a German investment corporation and Financierings-Maatschappij voor Ontwikkelingslanden N.V (FMO), a Netherlands development finance company, are to invest in Asian Alliance Insurance (AAI) Plc, a subsidiary of Softlogic Holdings Plc, purchasing 38% stake for Rs. 1.8 billion on the basis of 14.2 million shares at Rs. 128 each.
FMO Senior Investment Manger Arno De Vette (left) and Softlogic Holdings Chairman Ashok Pathirage (centre) sign the agreement to invest in AAI. DEG Investment Manager Thomas Kronsbein and AAI CEO and Director Ramal Jasinghe look on – Pic by Sameera Wijesinghe
Softlogic Holdings Chairman Ashok Pathirage, commenting on this investment yesterday said: “We are delighted to welcome DEG and FMO to a partnership that will create a comprehensive insurance proposition as Sri Lanka confidently moves towards US$ 4,000 per capita in 2012, thereby providing significant opportunities in the insurance arena. This partnership will be of tremendous benefit to all stakeholders, particularly since it will enable the company to access international expertise and strategy. We have carefully evaluated a number of potential investors for AAI and are extremely pleased to have DEG and FMO on board with us.”
FMO Senior Investment Officer Arno De Vette stated that this was their first investment in Sri Lanka, despite having being active in Sri Lanka for over 40 years and working with 10 companies in the country. He noted that the insurance sector in Sri Lanka was not well-developed. “Insurance penetration in Sri Lanka is quite low compared to a lot of other countries, for example India,” said Vette.
Speaking on the reason behind this partnership, Vette mentioned that they were very keen on the Softlogic Group. “They are an entrepreneurial group which is open to new initiatives. If we are to work with a company and introduce new initiatives, then we need a good partnership.”
He further added that as an investment company, FMO’s job is to stimulate private sector initiatives in emerging markets.
DEG Investment Manager Thomas Kronsbein asserted: “We strongly believe in the partnership. We see a lot of potential in Softlogic. We will give a big push to the company and this partnership will enable us to promote foreign knowledge and our expertise.”
Pathirage also stated that DEG and FMO were good technical partners as well as a good value addition to the company. He further explained that DEG and FMO would each purchase 19% of the 38% of shares, with the transaction taking place in early January next year.
AAI, which commenced operations in 1999, was bought over by the Softlogic Group in 2011 and since then the company has been doing extremely well. It was ranked amongst the top five players in the industry this September.
DEG, a subsidiary of KfW, is one of the largest European development finance institutions for long-term project and company financing, while FMO is a Dutch development bank that finances companies, projects and financial institutions from developing and emerging markets.
Asian Alliance Insurance PLC commenced operations in December 1999; today the company has grown from strength to strength to become one of Sri Lanka’s leading players in the insurance industry. The company caters to a clientele that consists of corporates and individuals. RAM Rating Ltd. has assigned a BBB- Rating to AAI based on the performance and internal processes. The rating underscores AAI’s claims paying ability (CPA), based on the soundness of the Company’s operations and financial strength. The secret behind the Asian Alliance Insurance success story lies in its ability to offer tailor-made insurance solutions to its customers. AAI is part of the Softlogic Group that is one of Sri Lanka’s most diversified and fastest-growing conglomerates, with interests in Healthcare, Retail, ICT, Leisure, Automobiles and Financial Services.
source - www.ft.lk
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