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CIC Insurance took a closer step to listing its shares at the Nairobi Securities Exchange (NSE) on Monday, with the appointment of a consortium of transaction advisers who will spearhead the process.
The move signals that the insurer could be listed at the NSE by the end of this year.
CIC picked Faida Investment Bank as lead transaction adviser, Kingdom Securities as sponsoring broker, Oraro Company Advocates as legal adviser, while Deloitte (auditor), Gina Din Corporate Communications (public relations) and Nuturn (advertising) complete the list.
The insurer plans to have its shares listed through introduction, which is an alternative to its earlier plan for an initial public offering (IPO)—which was shelved amid fears that it could miss its target due to the depressed stock market environment.
“We have a responsibility to safeguard our shareholders’ wealth and our risk analysts have advised the organisation that this is not the apt timing for an IPO,” said the CIC Insurance chief executive, Nelson Kuria in a statement.
CIC’s share is priced at about Sh80 each at the over-the-counter (OTC) market.
The insurer had planned to more than double its authorised capital to Sh3 billion from Sh1.2 billion through the creation of 90 million extra shares—as part of a resolution that was passed at the firm’s annual general meeting in October 2011.
“Were it not for the bear market, our shareholders had already passed a resolution to raise additional share capital by listing at the NSE in the first quarter of this year, subject to approval by pertinent regulatory bodies,” said Mr Kuria.
In 2011, the NSE 20 share index dropped by 28 per cent to 3,205.02 points from the January opening level of 4,495.41 points. Investor wealth, as measured by market capitalisation, dropped by Sh315 billion.
The appointed transaction advisers said they could not disclose the offer price or the exact date of listing to avoid breaching the Capital Markets Authority (CMA) rules. An official of Faida Investment Bank, while confirming that the firm had bagged the transaction advisory role, declined to give more details for fear of reprisals from the regulator.
“We cannot give more details until the CMA approves,” said the official. This will be the second time that Faida will be advising on the listing of a firm in the co-operative sector, after the investment bank won the lead sponsoring stockbroker role for the Co-operative Bank IPO in December 2008.
Kingdom Securities, which is the investment banking arm of the Co-operative Bank, will also be leaning on its knowledge of the co-operative movement while advising in the offer.
Co-operative Bank has a 21 per cent shareholding in CIC Insurance.
The insurer has announced plans to expand to the under-developed markets of South Sudan, Rwanda and Malawi.
The listing process began with a de-merger of Co-op’s life and general business operations, which was completed last year.
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