TUPAC wrote:did anybody @ wazua attend the EGM?
I did attend and posted the following to another CIC thread:
CIC Extra General Meeting – 17th September 2010 – KICC
Address by the CEO – Nelson Kuria
The CEO gave a historical perspective of the company from the 90s and how the company has since grown to be a major player in the country. His speech was punctuated by biblical quotations;
• In 1994 the Canadian consultant was hired after the company had received aid in the tune of KES 90M from Canada. The consultant concluded that the company will not survive.
• Among the companies that had been declared to be on their way to insolvency, CiC was at the bottom.
• The company went on to pay the foreign shareholders all their debts that had been held in preferential shares.
• In 2004 CiC moved to their new building the Upper Hill.
• This year it is expected to get net earned premiums of the tune of KES 4 billion from last years 2.8 billion.
• CiC holds position number 8 of the total insurance companies in Kenya.
• It is 4th largest insurer in Kenya.
• When the Insurance Regulatory Authority (IRA) raised the share capital to KES 450M, CiC was among the 1st companies to comply. By September 2010 it had raised its share capital to KES 600M. It is currently one of the best capitalized insurance companies in Kenya.
• Cooperative Bank is the largest single shareholder of CiC.
• CiC today is the role model of the Cooperative movement in the World. The only other Cooperative insurer in Africa is in Ghana. It has recently received capital injection, like the one CiC received in 90s.
• The CEO said it is important to capitalize on the current feeling of success to further grow the company.
• Current opportunities for CiC
o Vision 2030
o Growth of the Cooperative movement
o Youthful population – enormous potential
o New constitution – huge untapped potential
• Future belongs to those who plan now; hence CiC revised its strategic plan in August 2010.
• Developed Vision 2030 for CiC – repositioning for the future. If you don’t take change by the hand, it will take you by the throat.
• CiC will not lose its Cooperativeness even as it expands and plan for the IPO in 2013.
• The CEO said that the best days are yet to come and CiC is ready to seize this opportunity. Success is not a destination, but a journey.
• The organization has continued to invest in its employees.
• 2010 has been an impressive year based on the half year results
o Gross premium has grown by 36% over the same period last year
o Investment income has grown by 54% over same period last year
o PBT grown by 27%
Address by the Chairman – Japheth Magomere
The chairman said the decisions for the extra ordinary general meeting have prompted:
o The regulatory requirements
o Emerging markets
o New products
o Regional expansion
o Growth of premium and above requires increased capital to the company.
o CiC intents to operate in Sudan, Tanzania and Malawi in future:
Resolutions:
Resolution 1: Demerger of Life and General Business. This has been necessitated by Regulatory requirements. Long-term insurance business and the general insurance business shall be carried on by, wholly owned subsidiary companies of the Company incorporated for such purpose to be called, “CIC Life Assurance Limited” and “CIC General Insurance Limited”
Resolution 2: That the Company adopt and enter into the Corporate Re-organization Agreement, Asset and Purchase Agreement and Portfolio Transfer Agreements to effect the separation and demerger of the business of the Company;
Resolution 3: Change of Name and Conversion: That the name of the Company be and is hereby changed from the Co-operative Insurance Company of Kenya Limited to CIC Insurance Group Limited (my personal comments on the new name is it is better since it will sell regionally), subject to the approval of the Registrar of Companies;
Resolution 4: That the Company be converted into a public company. The chairman explained that this is a requirement before listing;
Resolution 5: Amendment of Memorandum of Association: That the provisions of the Memorandum of Association with respect to the objects of the company be altered to enable it carry on its business more economically or more efficiently. The following new objects will be included: To acquire and hold a controlling and other interests in the share or loan capital of any company or companies in Kenya and elsewhere, to engage in any activity or interest which appears likely to be advantageous to the Company, to take over as a going concern the business carried on by CIC Life Assurance Limited, CIC General Insurance Limited and CIC Asset Management Limited together with or any part of the property and assets comprised in or associated with any such businesses, and to discharge all or any of the liabilities of any such businesses, and pay for such acquisition either in cash or in fully paid shares or loan capital;
Resolution 6: Amendment of Articles: That the Company adopts new Articles of Association presented before it in place of its current Articles of Association;
Resolution 7: Adoption of By-Laws: That the Company adopts the by-laws of Co-operative Insurance Society Limited.
Resolution 8: Increase of Share Capital: That the authorized share capital of the Company be increased from Kenya Shillings Six Hundred Million (KShs 600,000,000) to Kenya Shillings One Billion, Two hundred million (Kshs 1,200,000,000) divided into 50,000,000 (Fifty million) shares of Kenya Shillings Twenty (Kshs 20) each by the creation of 30,000,000 (Thirty million) ordinary shares of Kenya Shillings Twenty (Kshs 20). . The chairman explained that current A shares will be held by a society, and finally there will be only one class of shareholders as opposed to the current shareholding structure. The company will eventually be listed in the NSE as the company expands in the region, its business subsidiaries will be adequately capitalized;
Resolution 9: Allotment of Shares: That the Board be and is hereby authorized to issue and allot the unissued share capital of the Company to the existing shareholders and to new share holders at such price and on such terms as they deem most beneficial to the company;
Resolution 10: Closure of Register of Members: That the register of members be closed for the period of thirty days from such a date as the Board may determine to allow for the issue and allotment of the new shares as authorized in the foregoing resolution.
Resolution 11: The Board of Directors of the Company be and is hereby authorized to sign all documents and to do all such things as may be necessary to give effect to the above resolutions.
My personal comments – Please note that these are just my comments and you should do your own research in order to get a professional view.
Key points:
o Growth potential of the company into the region
o Cooperative Bank is now the largest shareholder – strategic interest. Coop Bank has a lot of faith in CIC for it to have such a huge shareholding.
o IPO of the CIC to come around 2013 – This gives us time to reposition and grow our shareholding in the company. No need to rush now, we start and slowly build our shares.
o Increase of shares from initially 20 million shares to 30 million shares and these shares to be given to both existing and new shareholders. I believe there will be more shares and slight dilution; therefore I believe the share price could be in the region of 20 bob. My feeling is that not all Cooperatives will take up their rights. We could therefore utilize the opportunity to buy more and cheaper shares.
o Expected earnings are good based on the half year results indicated in my notes above.
o Finally we should be in the company, since there could be nice dividends and potential capital growth of our investments.