Money Markets
A CIC Insurance customer care official serves a client in Nairobi. The
company is eyeing the regional market through joint partnerships in
Uganda and Malawi. PHOTO | FILE
By JOHN GACHIRI, jgachiri@ke.nationmedia.com
In Summary
- The company did not indicate how much it is investing in its regional subsidiaries but the information memorandum for Sh5 billion bond offer said CIC planned to use Sh1.3 billion or 26 per cent of proceeds to expand to the three markets.
CIC Group
has established footholds in Uganda and Malawi by cobbling together
joint ventures with established cooperative movement players.
In Uganda, the listed underwriter has partnered with two saccos to form a jointly-owned insurance company.
The regional expansion has also seen CIC open subsidiaries in Malawi and South Sudan.
“We have partnered with Uganda Cooperative Savings
and Credit Union Ltd and Uganda Cooperative Alliance Ltd,” CIC chief
executive (designate) Tom Gitogo told the Business Daily.
CIC has at the same time concluded a management
deal with Malawi Union of Savings and Credit Cooperatives (MUSCCO) to
form a cooperative insurance company that would be co-owned on 50:50
basis, targeting the saccos’ members.
“The new insurance unit is expected to target
120,000 savings and credit cooperatives members, all of whom are
affiliated to MUSCCO,” reported Exotix, a London-based brokerage house.
The Exotix report, based on management meetings,
said CIC is wrapping up the partnership in Uganda that would have an
ownership structure similar to the Malawian subsidiary.
In South Sudan, the Kenyan underwriter linked to
the Cooperative Bank Group operates through CIC Africa Insurance, in
which it is the majority shareholder with a 69 per cent stake, while
Co-operative Bank of South Sudan owns the remaining 31 per cent.
The company did not indicate how much it is
investing in its regional subsidiaries but the information memorandum
for Sh5 billion bond offer said CIC planned to use Sh1.3 billion or 26
per cent of proceeds to expand to the three markets.
Another Sh1.2 billion (24 per cent) would go into recapitalisation of its subsidiaries.
Real estate was to take Sh1.7 billion with the remaining Sh800 million to go into construction of a medical facility.
The CIC bond, on sale in the last quarter of 2014, managed to attract bids worth Sh6.34 billion against the Sh5 billion sought.
The Exotix report adds CIC is targeting Kenyans at the low end of the market estimated at eight million.
CIC joined Britam
which in June 2014 went to the bond market to borrow for regional,
local expansion, investment in real estate and other corporate ventures.
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