The company’s plan to list on the NSE has been delayed by a slower-than-expected merger with local subsidiaries of its London-based parent firm Old Mutual Group. FILE PHOTO | NMG
The company’s plan to list on the NSE has been delayed by a slower-than-expected merger with local subsidiaries of its London-based parent firm Old Mutual Group.
The insurer’s net profit jumped 46.5 per cent to Sh1.2 billion in the year ended December, helped by a 28 per cent increase in investment income to Sh3.9 billion.
UAP says it is currently focused on restructuring its debt and on cutting costs, including by eliminating jobs duplicated by the merger with Old Mutual units.
UAP Holdings’ executives Peter Mwangi and James Wambugu were paid a total of Sh105.1 million in the year ended December, the insurer has disclosed in its latest annual report.
Their earnings, in the form of salaries, dropped five per cent from Sh110.7 million the year before. “In respect of executive directors, they are remunerated based on their employment contracts,” UAP said in the report. Mr Mwangi is the group chief executive while Mr Wambugu is the managing director in charge of the general insurance business.
Their respective remuneration was not broken down as is the standard for firms listed on the Nairobi Securities Exchange (NSE). UAP trades on the over-the-counter (OTC) market.
The company’s plan to list on the NSE has been delayed by a slower-than-expected merger with local subsidiaries of its London-based parent firm Old Mutual Group.
The insurer’s net profit jumped 46.5 per cent to Sh1.2 billion in the year ended December, helped by a 28 per cent increase in investment income to Sh3.9 billion. UAP says it is currently focused on restructuring its debt and on cutting costs, including by eliminating jobs duplicated by the merger with Old Mutual units.
“The group is also running a phased cost leadership project to make our organisational structure leaner with the elimination of overlapping and redundant roles,” the company says. “We concluded a restructuring associated with the first phase of the cost leadership project in March 2017. The exercise though difficult was necessary and we ensured that the exiting process was fair and as accommodative as possible to the affected staff members.”
Cutting costs is intended to help reverse its underwriting losses and reduce reliance on investment income which is influenced by stock market cycles. The insurer is set to convert Sh2.6 billion worth of short-term loans from Old Mutual into shares equivalent to a 6.5 per cent stake as part of its efforts to ease its debt load that has seen it explore multiple options including renegotiating loan terms with financiers. The proposed transaction comes after UAP breached the terms attached to a $7.3 million (Sh730 million) loan it owes Norway’s investment fund Norfund and the International Finance Corporation (IFC).
