African Bank Investments Said to Get Approach for Stangen Unitby
Buyer interest emerges after 1.38 billion rand deal fails
Revived bank in advanced talks with Guardrisk for insurance JV
The administrators of African Bank Investments Ltd., which collapsed last year, have received at least one approach for the group’s insurance business, according to two people with knowledge of the matter.
Both asked not to be identified because the discussions are private.
Stangen, as the insurer is known, sold credit life insurance and funeral policies to customers of the lending unit of African Bank Investments, or Abil, which was South Africa’s largest provider of loans not backed by assets. The unit, known as African Bank, was going to buy Stangen from Abil for 1.38 billion rand ($95 million) as part of its rescue plan. This sale collapsed after some of Abil’s shareholders objected to the valuation placed on the insurer and said it could be sold for 8 billion rand.
Without a bank to supply it with customers, Stangen has active policies but can’t take on any new business. The would-be buyers intend to profit from managing the policies until the last premiums are paid, the people said. At the same time, Stangen’s inability to attract new customers reduces its valuation in any takeover, they said.
Dawie Van der Merwe, a member of Abil’s business-rescue team, said in an e-mailed response to questions that he didn’t know of potential investors negotiating to buy Stangen.
To replace Stangen and enable it to sell insurance products, African Bank is in advanced talks with MMI Holdings Ltd.’s Guardrisk unit, the revived lender’s chief executive officer-designate, Brian Riley, said on Tuesday. African Bank plans to start operations under a fresh banking license in April next year.