CIC Group has converted the Sh495.5 million it had loaned to its subsidiary CIC Africa Uganda into equity, raising the value of its investments outside Kenya.
The insurer has disclosed in the latest annual report that it completed the deal during the financial year ended December 2022 when pretax earnings from the Ugandan arm improved from a Sh19.4 million loss to a Sh68.3 million profit.
The deal saw CIC Group's stake in the Ugandan subsidiary rise from 93 percent to 95 percent. The value of investment nearly tripled from Sh283.8 million to Sh779.3 million.
“During the year, the company converted its loan to CIC Africa (Uganda) Limited into the ordinary share capital of the subsidiary in the retirement of debt with the subsidiary. This resulted in an increase in interest in the subsidiary from 93 percent to 95 percent,” said CIC.
This saw the value of investments in Uganda race past that of the South Sudan unit, which closed the year with investments valued at Sh319.96 million.
Cumulatively, CIC investment in subsidiaries hit Sh4.18 billion from Sh3.68 billion.
The Ugandan unit, which had accumulated a Sh589 million loss by end of 2021, has been relying on the parent company for working capital.
CIC says all the subsidiaries closed the year in compliance with the solvency ratios except CIC Life Uganda, which had below the minimum capital need.
“CIC Life Uganda did not meet the minimum capital requirement at 31 December 2022 as per the insurance regulatory commission of Uganda. The group is taking remedial action to ensure this is cured,” said the insurer.
CIC entered Uganda in 2014 via a joint venture with Uganda Co-operative Savings and Credit Union Ltd and Uganda Co-operative Alliance Ltd.
