ReNaissance Financial Holdings has shored up its stake in composite financial group First Mutual Ltd (FML) to 30% after acquiring additional shares throu
gh the open market, businessdigest established this week.
Inside sources said ReNaissance last month acquired 134 million FML shares, representing 4% of FML’s issued share capital.
The group originally held a 26% stake in FML held either directly or through various investment vehicles.
The stake still remains insufficient for ReNaissance to secure control of FML, but sources indicated a relentless desire by the financial institution to strengthen its foothold in FML.
ReNaissance has had a running dispute with Capital Alliance, a management vehicle that originally controlled a 20% stake in FML.
The shares had been encumbered with debts from various financial institutions mobilised by ReNaissance to facilitate Capital Alliance’s acquisition of the shares.
ReNaissance had however wrestled control of the shares after Capital Alliance failed to repay the loans. The institutions unceremoniously called back the loans after closing due to a liquidity crunch.
ReNaissance gave the clearest indication that it was in FML for the long haul when it declared the financial institution a “strategically significant investment” in statements accompanying financial results for the year to December 31, 2005.
“(ReNaissance) made a strategically significant investment in First Mutual Ltd, the holding company of a group of companies involved in the insurance and actuarial services.
The investment is in line with the group’s long-term strategic plan,”ReNaissance board chairman, Christopher Chetsanga, said in a statement accompanying the group’s financial results.
“It is the group’s belief that FML is a well-managed and diverse group of companies with investments in most growth sectors of the economy and is expected to provide critical mass to RFHL (Renaissance),” Chetsanga said.
ReNaissance has so far managed to secure seats for four representatives on the FML board.