CIC Insurance shelves IPO plan

NAIROBI (Reuters) - Kenya's CIC Insurance has shelved plans for an initial public offering after a lengthy bear run at the Nairobi Securities Exchange, opting instead for a listing by introduction, where existing shares are placed on the market and no capital is raised.

"We have a responsibility to safeguard our shareholder wealth and our risk analysts have advised the organisation that this is not the apt timing for an IPO," Chief Executive Nelson Kuria said on Monday.

The firm, which said it was the third-biggest insurer in Kenya out of 46 in terms of gross premiums, with 4.55 billion shillings in 2010, wanted to raise cash for expansion.

"Were it not for the bear market, our shareholders had already passed a resolution to raise additional share capital by listing at the NSE in the first quarter of this year, subject to approval by pertinent regulatory bodies."

CIC, which does most its business in the country's vibrant cooperative movement, picked Faida Investment Bank as the lead transaction adviser for the listing by introduction.

Through a listing by introduction existing shares are put on the market, still held by the original shareholders, there is no initial offering to the public and the company does not raise capital. Once the shares are on the market, the shares can be traded publicly. CIC has not yet said what portion of existing shares will be listed by introduction.

Co-operative Bank, the country's fourth-largest bank by assets, is the single largest shareholder in CIC Insurance with 21 percent of the shares.

Kenya's IPO pipeline dried up last year on the back of a sustained fall in prices of shares. The sale of shares in British American Kenya in the middle of last year was undersubscribed.

Last year, the benchmark NSE-20 share index finished down 27.69 percent down at 3,205.02 points, underperforming the MSCI emerging equities index, which lost just over 21 percent of its value in the period.

NSE Chief Executive Peter Mwangi told Reuters last week that he expected five new listings this year.