Acquisition of shares in insurance company-Government seeks expressions of interest from strategic investors |24 November 2005

The new company came into being after the National Assembly on Tuesday approved the dissolution of the State Assurance Corporation of Seychelles (Sacos) by voting in favour of a bill seeking to repeal the State Assurance Corporation Act and vest the whole of Sacos' undertaking in a limited liability company.

The new company created, the SACL, has been incorporated under the Companies Act 1972, thus allowing government to privatise its shares in Sacos.

In total 80% of the capital of the SACL will be privatised, out of which 30% has been reserved for strategic investors with experience in the insurance business, 30% will be offered to the general public and 20% is to be made available for the company's staff interested in investing in the business. Government will retain the remaining 20%.

The public notice inviting for expressions of interests from strategic investors appears on page 3 in today’s issue of Seychelles Nation and is also being posted on government websites www.virtualseychelles.sc and that of the Seychelles Investment Bureau at www.sib.sc

The publication of the public notice will go on until December 1 and bidders must submit their expressions of interest by the latest on Friday December 16.

Only serious investors with good track records will be allowed access, with strict confidentiality, to a data room to be set up between December 19 to 23, to enable the bidders to view information and assess the assets of the insurance company. Only those who have submitted the expressions of interest will be allowed access to the data room.

Once they have viewed the documents, the bidders will have until January 6 between 9.00 a.m. and 3.00 p.m. to submit their final offers.

The successful bidder will be announced on January 13 and this will be followed by the signature of share sale agreement on January 27.

Following the signature, government will start procedures for the sale of the 20% shares to employees of the company and the 30% of the shares to the general public. The dates for these sales are yet to be announced.

Consultants from the Mauritius-based chartered accountant and auditing firm BDO De Chazal Du Mée (BDO DCDM), which has been appointed as the independent Transaction Advisor in the privatisation of the insurance company, said they have completed the preliminary work to review the activities of the company and to assess and audit its assets and liabilities.

The accountant firm started fieldwork on the privatisation of the then State Assurance Corporation of Seychelles (Sacos) about six weeks ago after it was appointed by the Privatisation Unit of the Department of Finance.

Speaking to the press yesterday, the two consultants from BDO DCDM, Messrs Jacques Harel and Thierry Montocchio, said the procedures and structure were now in place and a calendar for the privatisation of the company was now ready to be activated.

Mr Harel said they have advised that the 30% shares for strategic investors be sold first in line with government's aim of making maximum earnings from this transaction. The 30% shares will be sold as a chunk to only one entity, either an individual, a company or a consortium of companies, but with credible financial record and experience in insurance business in Seychelles. Mr Harel said a very good bank credit rating is a must to protect the company against bankruptcy.

The tender will be in both Rupees and foreign exchange.

The Life Insurance Fund and investment made under this fund, such as the Ocean View Property flats at Anse Etoile, will remain as they are and will not be privatised.

The shares that will be privatised will concern general insurance and the company's other assets such as investments in flats and properties under Sun Investment as well as the liabilities. According to the company's audited account of December 31, 2004, the assets of the then Sacos were valued at R247 million, excluding liabilities and life insurance.

The Transaction Advisor has recommended that government keep only a minority stake of 20% to ensure that control of the company is transferred to the private sector.

Other recommendations made to government include the proposal of a general privatisation legislation to pave the way forward for future privatisations.

BDO de Chazal du Mée (BDO DCDM) was established in 1952 as an accounting and auditing firm in Mauritius and is today the largest and well-known independent audit, tax and consulting firm in the Sub-Saharan Africa.