National Insurance Corporation Limited (NIC) plans to float its shares at the Nairobi Securities exchange for the first time as a means of improving the value of individual shares.
NIC will become the second Ugandan firm to cross-list on the Nairobi bourse after UMEME, a power utility, was cross-listed last year.
The move to cross-list on the Nairobi bourse was announced by the board of directors during the 13th Annual General Meeting of shareholders held on Friday in Kampala.
“We are going to start on the approval process of the various bodies in Uganda and Kenya, said Mr Bayo Folayan, the managing director of Nic.
Mr Bayo said the insurance company will widen that market for its shares thus increased demand.
“Cross-listing of the shares will lead to better visibility, improved competitive edge in the regional markets, increased share liquidity, better price discovery, access to a wider pool of both sophisticated and retail investors, and better prospects of raising capital,” said Dr Martin Aliker, the vice chairman to the Board of Directors as he explained the intention to cross-list to the shareholders.
The insurance giant intends to have its name changed from National Insurance Corporation Limited to NIC Holdings Limited.
“We are changing the name of the company in order to separate the life and none life businesses,” said Mr Bayo.
He added that the change of name is in line with Insurance law which was amended in 2011. The law states that the life and general business should be separated into two different bodies. The deadline for all insurance companies is December this year.
The shareholders also unanimously approved the issuing of 819,661,942 new shares worth Shs20, 491,548,550 at the current market price as bonus shares to shareholders who were on the register of Shareholders on June 20, 2014.
The bonus shares shall be selected in the ratio of 11 new shares for every eight shares held by the shareholders respectively on that day, and such, new shares shall rank pari passu (at the same rate) for all purposes with existing issued shares of the company.
Performance of National Insurance Corporation Limited
Dr Aliker whilst presenting the company’s 2013 annual report, on behalf of the chairman, Mr Remi Olowude, said the company’s premium increased in 2013 by 22 per cent from Shs7.83 billion recorded in 2012 to Shs9.52 billion as at December 31, 2013.
The company’s total assets also grew by 3.6 per cent from Shs82.053 billion in 2012 to Shs85.04 billion in the year under review.
Underwriting profit also increased by 34 per cent from Shs4.36 billion in 2012 to Shs.5.5 billion in 2013.
However, the managing director named the Makerere Insurance saga as one of the biggest setbacks to the company’s performance.
He was quick to applaud their customers for remaining committed even during company the hardest times.