The insurer entered Uganda in 2014 through a joint venture with Uganda Co-operative Savings and Credit Union Ltd and Uganda Co-operative Alliance Ltd.
CIC currently holds a 90 per cent stake in the subsidiary.
The company is engaging Ugandan co-operative entities to make minimum investments equivalent to Sh5,000 each.
CIC Insurance Group #ticker:CIC is seeking to dispose of at least a 30 per cent stake in its loss-making Ugandan subsidiary by selling the shares to Saccos in the neighbouring country.
The insurer entered Uganda in 2014 through a joint venture with Uganda Co-operative Savings and Credit Union Ltd and Uganda Co-operative Alliance Ltd, which jointly control a 10 per cent stake.
“What we are looking in Uganda is to just have a majority stake. At the moment, we own too much of the business there and anything in the neighbourhood of 60 per cent will be appropriate for us,” chief executive Tom Gitogo said.
“However, that will depend on the financial ability of the Ugandan co-operatives to invest in our business.”
CIC currently holds a 90 per cent stake in the subsidiary.
It remains to be seen what CIC could fetch in the transaction, with the subsidiary (CIC Africa Uganda) being technically insolvent.
The Nairobi Securities Exchange-listed firm had invested Sh233.7 million in the unit as of December 2016.
The company is engaging Ugandan co-operative entities to make minimum investments equivalent to Sh5,000 each.
Saccos control 74 per cent stake of CIC shares with the remaining stake listed on the Nairobi bourse. The firm has been footing the bills of its regional loss-making subsidiaries.
CIC’s subsidiary in South Sudan, where the insurer holds 69 per cent stake with the remainder controlled by Co-operative Bank of Kenya, however posted a Sh90 million pre-tax profit in the six months ended June, Mr Gitogo said.
“We were fortunate to have invested in dollars that have overridden hyperinflation situation there (South Sudan),” he said.
“We have still not broken even in Uganda and Malawi. We are hoping to do so this year or at worst next year. In our strategy, we don’t expect any of the regional businesses to be making a loss post-2018.”
CIC owns 49 per cent in Malawian unit where it entered in March 2014 after signing a Sh300 million deal with Malawi Union of Savings and Credit Co-operatives (MUSCCO) Ltd.
