KARACHI: A Finnish fund is going to buy a 14.97 per cent stake in TPL Insurance Ltd, a subsidiary of TPL Corporation Ltd, for $3 million.

Speaking to Dawn on Friday, TPL Insurance Ltd CEO Muhammad Aminuddin said Finnish Fund for Industrial Cooperation Ltd (Finnfund), a private firm incorporated in Finland, will invest roughly Rs540m in the Pakistani insurer in a special rights transaction.

“New shares will be issued and fresh capital injected into the company. The shareholding of existing owners will get diluted, but the company will benefit from the inflow of extra cash that it’ll use for strategic initiatives,” he said, noting that the transaction will make the capital structure of the company stronger.

Finnfund is a development financier and impact investor that buys stakes in “responsible and profitable” businesses in developing countries. Finnfund will hold a 14.97pc of the total issued share capital on a fully diluted basis, subject to obtaining all regulatory approvals, a separate notice on the stock exchange said.

Last year, TPL Insurance raised an equity investment equalling 19.9pc of share capital from DEG, the private equity arm of the German government.

According to the annual report for 2021, TPL Corporation and TPL Holdings held a collective stake of 64.38pc in TPL Insurance. After the transaction, the stake of the TPL Group in the insurer will reduce to 54.73pc, said Mr Aminuddin.

The shares of TPL insurance traded at Rs32.50 apiece on Friday, down 6.72pc from a day ago.

Published in Dawn, April 16th, 2022