CIC Insurance plans to raise new capital after paying its Sh5 billion bond next week. The Nairobi Securities Exchange-listed firm will give priority to the sale of its 712 acres of freehold land before considering other options to replenish its balance sheet.
Chief executive Tom Gitogo told the Business Daily that the company currently has enough cash and cash equivalents to settle the bond, adding that the need to boost its capital will come later.
“You cannot pay out that much without realigning your balance sheet for very long; so we may need to re-engineer our balance sheet with time,” Mr Gitogo said.
Sale of the land holdings in Kajiado and Kiambu counties, if successful, will take care of the balance sheet repair.
Mr Gitogo did not say what other fundraising options are on the table if the insurer is not able to sell the land.
The company could get upwards of Sh10 billion from the land transactions.
“We have received several offers, none of which is acceptable to us,” Mr Gitogo said.
CIC has carried the land holdings at cost, meaning that the sale will result in substantial gains in line with appreciation of land values over the years.
CIC has invited prospective buyers to acquire a total of 512 acres it holds in Kajiado. The company has three parcels of land in Kajiado — 200 acres, 120 acres and 192 acres.
The company is also selling 200 acres in Kiambu. CIC had earlier planned to use most of the land to develop residential units for sale.
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