NAIROBI, Kenya
Shares of UAP Holdings Limited opened for purchase by the public today following the launch of the company’s public offer. The company is seeking to raise Kshs750 million from the capital market through the public offering of its shares which was approved by the Capital Markets Authority (CMA) last week.
UAP is floating 12,500,000 new ordinary shares at an offer price of Kshs 60 per share. UAP Holdings Group Managing Director Mr James Muguiyi said the funds raised from the public offer would be used to boost the company’s regional operations. “This Public Offer gives us an opportunity to increase the scope of our operations and widen our footprint in the region. We already have a presence in Kenya, Uganda, South Sudan and Rwanda, our newest market. We have also obtained license to begin operations in the Democratic Republic of Congo and we are finalizing entry into the Tanzania market before the end of the year,” said Mr. Muguiyi.
He noted that the public offer 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 public offer is one of the key milestones in the long history of the UAP Group. Our performance has been characterized by steady, prudent and profitable growth focused on wide geographical coverage. 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,” said Mr. Muguiyi.
The Kshs750 million is part of Kshs5.4 billion that UAP is targeting to finance its regional expansion plans, strengthen the balance sheet of its existing businesses as it seeks to take advantage of strong investment opportunities present in selected markets in Africa. In April this year, the company raised Kshs 4.6 billion from three international private equity investors: Aureos Africa Fund L.L.C, AfricInvest Fund II L.L.C and AfricInvest Financial Sector Fund, as well as Swedfund International AB.
UAP Holdings recorded an impressive 2011 financial results, significant improvement over 2010 on all key measures, with excellent growth in profitability, 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, etc., and enhanced business relationships with brokers and agents. Coupled with a good track record of claim settlement, customers have continued to give us more business,” said Mr. Muguiyi.
The public offer will not involve a listing of the Company’s shares on the Nairobi Securities Exchange (NSE). However, the company intends to list on the NSE within a period of 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,” said Mr Muguiyi.
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, and Coulson Harney is the legal advisors, PwC are the reporting accountants and CDSC share registrars while Hill+Knowlton Strategies and Scanad are the public relations and advertising consultants, respectively. The offer closes on 5th December, 2012.
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