UAP opens window for shareholders to cash stock

UAP Holdings has launched trading of its shares on the over- the-counter (OTC) market, offering its shareholders an avenue to cash in on their investment while also opening a path for new investors to buy into the company.

No complete trades were recorded Wednesday characteristic of the OTC system, which takes at least a day for dealers to match investors’ buy and sell orders.

Trading of the insurance group’s shares is being handled by Genghis Capital and CFC Stanbic, who are hosting the OTC trading platform.

“They have to match orders after the markets close,” said UAP finance director Jackson Theuri in a telephone interview.

UAP share was sold at Sh60 through a limited public offer that raised Sh750 million.

The offer was oversubscribed by 30 per cent, attracting 951 new investors who applied for shares worth Sh971.9 million.

UAP has 211 million authorised shares most of which are held by large investors, limiting the firm’s free float. The least number of shares that can be traded is 500 and in multiples of 100 thereafter.

UAP group chairman Joe Wanjui said during Wednesday’s launch that the OTC market would make the shares easily tradable in the transition period between now and when the company lists on the Nairobi Securities Exchange (NSE).

“We remain committed to ensuring that we list UAP shares on the NSE within a period of 12 to 18 months, and we are optimistic that the OTC market will enhance this process by ensuring an efficient price discovery process,” said Mr Wanjui.

The company is set to become the seventh listed insurance group on the Nairobi bourse. The group also expects to issue more shares following board approval for an Employee Stock Ownership Plan (ESOP).

“The board has approved the share ownership plan to ensure that both the companies and employees needs are aligned,” said outgoing managing director James Muguiyi.

The ESOP is in two forms, a share-award scheme and a share-option scheme. The share-award scheme will allow employees to buy shares in the company at a 20 per cent discount on the prevailing market rate.

UAP has set aside three million un-issued shares under the first option. The share-option scheme will allow qualified employees to buy an option at Sh500.

About two million un-issued shares have been set aside under this option.

The public offer that started on November 14, marked the last leg of UAP’s capital raising initiative that had already seen it raise Sh4.55 billion earlier last year through loans provided by Aureos, Swedfund and AfricInvest, which are private equity funds.