By Michael Eboh

Guaranty Trust Bank, GTBank, Plc has concluded arrangements to sell its insurance subsidiary, Guaranty Trust Assurance Plc to a Mauritius firm, Assur Africa Holding, AAH, comprising three private equity funds and three international developmental finance institutions based in United Kingdom, France, Tunisia and Germany.

According to a statement by the bank, its 67.68 per cent stakes in the company, valued at about N11.91 billion will be sold to AAH subject to the approval of the regulatory authorities and its shareholders.

The planned sale is in response to the Central Bank of Nigeria’s directive abolishing universal banking. The abolition of universal banking, forbids banks from undertaking services or activities apart from its core banking activities. It also forbids banks from owning or having interests in subsidiaries or companies not involved in banking.

The bank expressed confidence that the transaction will be completed by the end of the third quarter of 2011.

The statement from the bank disclosed that AAH is a special purpose vehicle incorporated in Mauritius for the purpose of the GTAssur acquisition, adding that the shareholding structure of AAH is made up of six members comprising three private equity funds with substantial investments across Africa – African Development Partners I, advised by Development Partners International (DPI) based in the United Kingdom, AfricInvest II LLC and AfricInvest Financial Sector Limited, both advised by AfricInvest Capital Partners (ACP) based in Tunisia – and three international developmental finance institutions – DEG (Germany), Proparco (France) and FMO (Netherlands).

The acquisition, according to the bank, is also being made in conjunction with a number of Nigerian investors.

Speaking on the planned sale, Mr. Segun Agbaje, Managing Director/Chief Executive, GTBank, said, “This is a critical milestone in the implementation of our compliance plan with the new licencing regime of the Central Bank of Nigeria, on the back of shareholders’ approval obtained at the bank’s EGM held in October 2010.”

On the selection of AAH as GTBank’s preferred bidder, Agbaje explained, “Over the last seven years, GTBank has imparted on GTAssur our unique and enduring culture based on ethical and professional conduct as well as a high level of corporate governance, a legacy which has helped project the company from a marginal position, 97th in market share as at 2003 to a leadership position, 5th by 2010.

“In this regard, we are proud of our contribution to the development and deepening of the Nigerian insurance industry.

“With the pedigree of the new buyer, the Bank is confident that AAH will continue to promote a culture of corporate governance in GTAssur that is consistent and compatible with best practice.

In addition, AAH’s robust post-acquisition plan for GTAssur as well as its support of the GTAssur management team and its strategy to profitably grow the business beyond the bank’s divestment contributed to its selection as the preferred bidder for GTBank’s 67.68% shareholding interest in GTAssur.

“This sale realises significant value for our shareholders.”