Uganda's NIC seeks approval to cross-list shares

Saturday August 2 2014

By KENNEDY SENELWA Special Correspondent

Uganda's National Insurance Corporation Ltd has announced plans to cross-list its shares on the Nairobi Securities Exchange in a bid to raise its visibility in East Africa.

According to company officials, NIC, which is 60 per cent owned by Industrial and General Insurance (IGI) of Nigeria, is seeking to access a pool of investors to improve its competitive edge in the region.

The insurance company, which is listed on the Uganda Securities Exchange, wants to take advantage of robust trading at the NSE to boost its market share.

The firm is already seeking approval from regulatory bodies in Uganda and Kenya for cross-listing of its shares.

Upon completion of the process, NIC will become the second Ugandan firm to trade its shares on NSE, after Umeme, a power utility cross-listed last year.

‘‘The cross-listing will lead to increased share liquidity, better price discovery, access to a wider pool of investors, and better prospects of raising capital,” said NIC vice chairman Dr Martin Aliker.

He said cross-listing  will lead to better visibility and an improved competitive edge in the regional market. NIC is the only insurer that has been trading on the Ugandan bourse since 2010.

The listing came with additional compliance reporting requirements to USE and the usual obligations to the Insurance Regulatory Authority.

IGI acquired majority shares in NIC in June 2005 through a competitive international bid.

NIC ownership

Before then, NIC was 100 per cent owned by the Ugandan government.  IGI is also the largest shareholder in  Societe Nouvelle d’Assurances du Rwanda (Sonarwa), which has insurance market share of about 64 per cent.

NIC also intends to change its name to NIC Holdings Ltd to separate the life and non-life businesses, in compliance with Uganda’s insurance regulations, said managing director Bayo Folayan.

The insurance law, which was amended in 2011, requires that life and general business be separated into two different entities.

The deadline for all insurance companies to comply with the requirement is December this year.

Life insurance companies are also required to increase their paid-up capital to $1.2 million, from the current $394,000, while the non-life companies are to increase theirs to $1.6 million.

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