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UAP Holdings MD James Muguiyi (r) and Finance PS Joseph Kinyua during the launch of the company’s Public Offer. UAP is floating 12,500,000 new ordinary shares at an offer price of Sh60 per share/CFM

Kenya

UAP seeks Sh750mn in public offer

UAP Holdings MD James Muguiyi (r) and Finance PS Joseph Kinyua during the launch of the company’s Public Offer. UAP is floating 12,500,000 new ordinary shares at an offer price of Sh60 per share/CFM

NAIROBI, Kenya, Nov 8 – UAP Holdings Limited is seeking to raise Sh750 million from the capital market through the Public Offering of 12.5 million new ordinary shares for Sh60 per share in order to boost the company’s regional operations.

UAP Holdings Group Managing Director James Muguiyi said the money the company is seeking to raise with the Public Offering is part of Sh5.4 billion that UAP is targeting to use to fund its regional expansion plans, strengthen the balance sheet of its existing businesses as it seeks to take advantage of strong investment opportunities in Africa.

He noted that they already raised Sh4.7 billion from private equity investors earlier in the year, helping to strengthen their presence in Kenya, Uganda, South Sudan and Rwanda.

He added that they have also obtained licenses to begin operations in the Democratic Republic of Congo, while finalising entry into the Tanzania market before the end of the year.

Muguiyi said that the Public Offer now gives Kenyans and East African citizens a chance to own part of a successful heritage the company has built over the years and to share in the future growth of the business.

“This offer will give Kenyans, and by extension other investors in the region, an opportunity to own a stake in the company they have supported tremendously for more than 90 years,” he said.

UAP recorded impressive 2011 financial results driven by a strong growth in written premium, investment income and a material uplift in new business growth.

“Premiums have continued to grow due to new business underwritten, introduction of new products such as Afya Imara, SalamaSure and enhanced business relationships with brokers and agents,” he explained.

“Coupled with a good track record of claim settlements, customers have continued to give us more business,” he added.

The Public Offer will not involve listing of the company’s shares on the Nairobi Securities Exchange (NSE).

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However, Muguiyi revealed that they intend to list the company on the NSE within 12 to 18 months.

“UAP Holdings Limited is not seeking a listing of shares on the Nairobi Securities Exchange at this stage, but the shares will be traded in an Over The Counter (OTC) market, which we hope will provide sufficient liquidity prior to the listing,” he explained.

The offer will open on November 14 and close on December 5, while the trading of newly issued shares on the OTC market is set to commence on January 9, 2013.

Treasury PS Joseph Kinyua said the government, through the Insurance Regulatory Authority, was working closely with industry players to initiate further legislation aimed at extending insurance services to the majority of Kenyans.

He lauded UAP for its efforts in making East Africa a single financial market under the Common Market Protocol, by making inroads in the sub-region market and expanding business interests to include investment management, property investments, development, securities brokerage and financial advisory.

“We see the opportunity to go public as a way to revolutionalise your management systems and position the company to effectively compete in the region with diversified products,” he said.

CfC Stanbic Bank and CfC Stanbic Financial Services are the joint transaction advisors, CfC Stanbic Financial Services and Genghis Capital are the joint lead placing agents, Coulson Harney is the legal advisors, PriceWaterhouseCoopers are the reporting accountants, Central Depository & Settlement Corporation share registrars, while Hill and Knowlton and Scanad are the public relations and advertising consultants.

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