THE National Insurance Corporation Ltd (NIC) has postponed an Initial Public Offer (IPO) of 40% of its shares to the first quarter of 2009 as the effects of the global financial crisis continue to be felt closer home.
Remi Olowude, the NIC chairman, said the market conditions were unfavorable for an IPO this year. Industrial and General Insurance Company (IGI) of Nigeria paid the Government $3.625m for a 60% stake in NIC in 2005.
The agreement signed between IGI and the Government requires the Government to sell its 40% shares to the Ugandan public through an IPO. Part of the 40% will be sold to NIC staff through a share ownership scheme.
IGI sought some local partners who became part of the investment vehicle that led to the incorporation of Corporate Holdings Ltd. The shareholding of Corporate Holdings comprises 85% IGI, while 15% belongs to businessman Patrick Bitature and Erik van Veen, MTN’s chief commercial officer.
Japheth Katto, the chief executive officer of the Capital Markets Authority (CMA), noted that the postponement had implications.
“The implication is that matters of accounts will be outdated. NIC will have to resubmit fresh accounts because the set we looked at will be time barred,” he said in an interview on Tuesday.
Katto stated that while the CMA had approved NIC’s prospectus, the timing of the IPO was determined by the issuer.
“They must have done a market survey and were advised that the timing was not right.
We have been told that NIC will be in the market in the first quarter of next year. As regulators, we would like them to go to the market as soon as possible because the matter has been pending for a long time,” he explained.
Kenya’s Cooperative bank rolled out a Ksh6.7b initial public offering in the last quarter of the year in which 701.3 million shares were offered at Ksh9.5.
However, the bank managed to raise Ksh5.5b, representing 81% of the IPO with investors getting full allotment of shares applied for.
This is a contrast to the 21% allocated to Safaricom shareholders earlier this year due to an over-subscription.
