Zurich Financial Services is to sell 10% of its share in South African Eagle Insurance Company to a financial company owned by a population of black South Africans as part of a directive to increase the economic status of black citizens in the southern African country.
Zurich has signed an agreement to sell the stake of South African Eagle, a majority-owned subsidiary, to Royal Bafokeng Finance (RBF), a company wholly-owned by the Royal Bafokeng Nation (RBN). The Royal Bafokeng Nation is a community of 300,000 people based in Rustenburg.
The transaction will fulfill a requirement to a South African government charter designed to achieve black economic empowerment. The goal of the empowerment initiative, as set out in the Financial Sector Charter, is to strengthen South Africa’s democracy through broadening economic participation and creating opportunities for the black people of South Africa.
As part of the agreement, RBF is entitled to nominate one director to the SA Eagle Board and it has an option to increase its shareholding in line with the ownership requirements of the Financial Sector Charter.
Moreover, SA Eagle has undertaken, in line with the terms of the Charter, to fund specific projects nominated by RBF in areas such as corporate social investment, enterprise development and empowerment financing, subject to approval by the SA Eagle board.
Commenting on the sale, Kgosi Leruo Molotlegi, King of the Royal Bafokeng Nation, said, The Royal Bafokeng Nation is delighted to be associated with Zurich. The acquisition of this interest in a leading financial services company is an important step in broadening the community’s access to cost-effective financial products and increasing our involvement in the national economy.