UAP listing plan sets exit path for key shareholders
UAP Insurance staff celebrate winning during the Insurance Awards in July this year. The insurer plans to list on the stock market in the next one year. file
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UAP, which is a parent company of several insurance and financial service firms in Kenya, Uganda, and Sudan, also announced a public share sale intended to raise Sh750 million.
UAP Holdings has announced intention to list its shares at the stock market in the next one year, setting the exit path for major investors eager to unlock their investment in the insurance group.
UAP, which is a parent company of several insurance and financial service firms in Kenya, Uganda, and Sudan, also announced a public share sale intended to raise Sh750 million.
The sale of up to 12.5 million shares will open on Wednesday next week, just a few months after the firm announced that it had raised Sh4.7 billion in convertible bonds from a consortium of private equity funds.
“The intention is that the listing will be (done) within a period of approximately 12 to 18 months of the public offer,” said UAP in a statement released on Thursday.
The company said it had obtained approval from the Capital Markets Authority for the share sale.
UAP’s shares will be traded on the over-the-counter market, which allows investors to buy and sell shares without going through the stock exchange. Majority shareholders of the company are listed as Afrinvest, Aureos, and Swedefund who jointly own 39.88 per cent of the company.
Bawan Ltd owns 21.46 per cent, Centum Investment Company 14.56 per cent, and businessman Chris Kirubi controls 10.11 per cent of the firm.
UAP Holdings is the parent company of UAP Insurance in Kenya, UAP Uganda, UAP Sudan, UAP Life Assurance, and UAP Financial Services which bought out Made in Africa Investment Banking in Uganda, giving it a seat on the Uganda Securities Exchange.
The company disclosed that the convertible bonds held by the private equity funds will be converted into shares when the public offer is completed.
Naval Sood, who is in charge of the team that is handling the share offer at CfC Stanbic Bank, the joint transaction advisor with CfC Stanbic Financial Services, said the timing of the listing was to allow the firm to consolidate its operations before going public.
“The idea is to get about 1,000, fairly sophisticated investors. The capital markets outlook for the next year is uncertain,” said Mr Sood.
In September, the company had indicated that it would be listing its shares by way of introduction, which does not involve seeking new funds from the public.
Analysts at Genghis Capital said that the plan to list by introduction provides a speculative premium for investors upon introduction of the shares on the NSE, citing price movements in the first few days of trading of Longhorn, CfC Insurance Holdings, TransCentury, and CIC Insurance.
The share prices of the four companies shot up by between 20 and 141 per cent on the first day of trading, according to the stockbroker.
The closing date has been set for December 5, announcement of results will be done on December 21, with the start of trading on the over-the-counter market set for January 9.
UAP Holdings adds to the growing number of firms that are getting into the over-the-counter market after share sales, which has been occasioned by the need to raise capital and meet regulatory requirements.
SMEP Deposit Taking Microfinance is seeking to raise Sh1.6 billion in a public offer that is restricted to church-affiliated institutions, individuals, and the micro lender’s customers.
The share sale is aimed at helping SMEP to meet Central Bank of Kenya’s regulatory requirements.
Kenya Women Finance Trust has also started a process that will see its main shareholder reduce its stake in the firm to 25 per cent in 2014, also to meet the banking regulator’s requirements.
