Friday January 17 2014

NIC raises Shs7b from Rights Issue


Kampala- National Insurance Corporation (NIC) has raised Shs7.04 billion from the Right Issue it offered last year, which Uganda Securities Exchange (USE) say is a good performance.
Statistics accessed by the Daily Monitor ahead of today’s official listing of new NIC additional shares generated through the Rights Issue at USE indicate that the Shs7.04 billion is a performance of 83.8 per cent of the targeted Shs8.4 billion to be raised.

NIC is among the eight locally listed companies on Uganda Securities Exchange with its share price going for Shs30 per share.
There are three big shareholders in NIC and results show that Corporate Holdings Limited, the largest shareholder applied for its full entitlement of new shares and maintains 60 per cent shareholding in NIC.

Crane Bank, the second largest shareholder did not take up its entitlement of new shares while Dr Ruparelia, the third largest shareholder did not take up his entitlement as well.

Right issues results shows that the retail investors have benefited greatly from the lack of participation of the second largest and third largest shareholders, adding that apart from the top three shareholders, the New Shares entitlement for retail shareholders was approximately Shs64 million new shares.
Computed figures show that during the offer, this segment took up their 64 million plus 12 million, amounting to 76 million new shares, an increase of 18 per cent above their entitlement.

“The successful capital call of the Rights Issue demonstrates shareholder and investor confidence in both the issuer (NIC) and Uganda’s stock market as we move into 2014,” Mr Robert H. Baldwin, the chief executive officer Crested Stocks and Securities told the Daily Monitor in an interview.

Crested Stocks and Securities are Joint Lead Transaction Advisors to the Rights Issue together with Standard Investment Bank of Kenya.

Mr Baldwin added “We see this transaction as an example of East African Investment Banking cooperation between SIB (Kenya) and Crested (Uganda). This is the direction that future transactions in the region must take, to build local capacity and expertise to implement these kinds of deals” Amish Gupta Regional Director Investment Banking, Standard Investment Bank.”
On the performance of NIC’s Right Issue, USE’s Innocent Dankaine said it is encouraging and it demonstrates a bright future for Uganda’s corporate actions.