CIC Insurance asks shareholders to double capital base

Money Markets

Mr Nelson Kuria, the CIC chief executive. Photo/FILE 

By John Gachiri

In Summary

• The listed insurer said it will ask its owners to pump in more capital at the 36th annual general meeting (AGM) expected to take place on June 19.
• Shareholders will also be asked to capitalise Sh436 million through a bonus issue of a share for each five held.
• The board will seek shareholder approval to set up subsidiaries and enter into joint ventures vehicles to be used to drive the group’s expansion.

CIC Insurance plans to ask shareholders to fund its multi-billion expansion through a rights issue.

The listed insurer said it will ask its owners to pump in more capital at the 36th annual general meeting (AGM) expected to take place on June 19.

The underwriter’s directors proposed, at a board meeting held last week, to double the firm’s share capital to Sh6 billion from Sh3 billion and to facilitate the cash call.

“That the company undertakes a rights issue by the offer of new ordinary shares to its existing shareholders at such price, on such terms and at such a date as the board of directors may determine subject always to the receipt of the approval of the Capital Markets Authority,” said CIC group company secretary and legal officer Gail Odongo in a statement to owners.

Shareholders will also be asked to capitalise Sh436 million through a bonus issue of a share for each five held. The board will seek shareholder approval to set up subsidiaries and enter into joint ventures vehicles to be used to drive the group’s expansion.

CIC chief executive Nelson Kuria had earlier said the firm’s expansion plan will see it invest more in real estate and enter new markets.

READ: CIC Insurance seeks Sh3 billion for real estate projects

In late March CIC signed a deal with the Malawi Union of Savings and Credit Co-operatives (Muscco) to start an insurance firm in the southern African country, which should be launched by July.

An insurance sector report by Sterling Capital says the firm has allocated Sh10 million towards setting up a real estate subsidiary.

“Although the registration process is still underway, CIC plans to inject an initial capital of Sh10 million into the subsidiary. Funding will be through both equity and debt, by joint ventures with international investors as well as through development financial institutions.

CIC intends to construct commercial and residential properties,” says Sterling Capital’s report.

The insurer is planning to construct an estate on 200 acres acquired in Kiambu County, next to the proposed but stalled Tatu City Development.

The listed company is reading from a similar script as competitor Britam, which is also raising cash for expansion into new markets in addition to increasing its property portfolio. Britam is raising funds through a corporate bond.