CIC Insurance Group has postponed the sale of its subdivided 200-acre land in Kiambu to next month after the August General Election.
The land was subdivided into quarter-acre plots after the company fail to dispose of the property as one block in a single transaction. The land, next to Tatu City, was at Sh3.8 billion in December 2021. Dividing it into pieces and selling it to different buyers is likely to fetch a higher price.
The proceeds from the sale of the parcels from the 200-acre land will go towards repayment of its liabilities; improving CIC’s capital position and boosting its cash flows. One of the insurer’s liabilities is a loan from Co-op Bank. As of December 2021, its borrowings, including the credit facility from the bank, stood at Sh4.36 billion. The loan was part of the funds that the insurer mobilised to settle its Sh5 billion corporate bond in 2019.
The loan has a fixed interest rate of 12.5% with a tenure of five years due for repayment in 2024. The insurer used the land as security to acquire the loan from Co-op bank; which owns a 24.8 percent stake in the firm. A quarter-acre plot in the area is going for between Sh7 million and Sh8 million, implying that the insurer could raise about Sh6 billion from the new selling strategy.