Govt sheds of 50% stake in SIC Hope to raise GH¢30million

SIC lists Shares (fin)
Story: Boahene Asamoah & Paul Akweterh Mensah




STATE Insurance Company Limited has officially launched its much-awaited Initial Public Offer (IPO) to shed off the government’s 50 per cent stake in the company in Accra yesterday.
A total amount of about GH¢30 million (¢300 billion) is expected to be raised through the sale of 97,822,500 million shares at Gp 30 (¢3000) per share.
Out the total shares, 10 per cent, which is 19,564,500 has been allocated to the staff of the company as part of incentives to motivate the staff under an Employee Share Ownership Plan (ESOP).
The government has indicated that it would offer an additional 10 per cent should the shares be oversubscribed, to bring its shareholding to 40 per cent.
The company over the past five years had delivered profitability with profits soaring from GH¢550,000 (¢5.5 billion) in 2002 to GH¢2.95 million ( ¢29.5 billion at the end of last year.
The half-year performance of the company for the 2007, however, showed net profits dropping slightly to GH¢1.4 million (¢14.1 billion) from the 2006 figure of GH¢1.597 million (¢15.97 billion) for the same period.
The three-week flotation offer will end by December 21, 2007, after which it is expected to be listed on the Ghana Stock Exchange.
SIC would be the second insurance company to be listed on the Ghana bourse if its IPO becomes successful.
Speaking at the function, the Managing Director of the SIC, Mr Peter Osei-Duah, said that the company would partner the government to develop the necessary regulation that would ensure that local insurance companies benefited from the business of oil find in the country.
He cautioned that if the country failed to act to ensure that local insurance companies played an active role in the oil discovery in the country, it stood to lose tremendous resources from the activities of the oil rigging business.
Mr Osei-Duah expressed worry that the big multi-national oil drilling companies would resort to undertaken insurance with their global partners, thereby by-passing local insurance companies in the insurance business.
“We want to partner government to ensure the enforcement of regulations that would ensure that local insurance companies benefit from the oil drilling activities in the country”.
The managing director said the company was positioning itself strategically to take full advantage of the oil business in the country and assured prospective shareholders that the prospects of the company looked brighter.
A Minister of State at the Ministry of Finance and Economic Planning, Dr Anthony Osei-Akoto, said the government was selling part of the company as part of the government’s efforts to develop the Ghanaian capital market, to release state-owned entities from governmental controls to enable them to compete more effectively and reduce the government’s involvement in the running of commercial businesses.
He called on other insurance companies to take advantage of the capital market to raise long-term capital to expand their businesses.
The Commissioner of the National Insurance Commission, Ms Josephine Amoah, stated that the years ahead would present a lot of challenges for the insurance sector and urged them to position themselves to brace up for the challenges ahead.
She mentioned that the minimum capitalisation of insurance companies in the country of $1 million each for the life and general business was still too small.
The Board Chairman of the company, Prof Isaac Mensah Ofori, called on the general public to invest in the company as the company had good prospects.
SIC, has a total of 45 per cent market share in an industry that has 22 such companies.