Gareth Manning, Gleaner Writer
( left - right ) BLYTHE AND WILLIAMS
THE UNITED General Insurance Company (UGIC) will not be seeking to raise funds through a private placement of its shares, financial advisers to the company say.
NCB Capital Markets' managing director Christopher Williams says the company will instead focus on strengthening its balance sheet over the next nine to 18 months to make the company more attractive to investors.
"At the end of the process, we expect to have a very attractive value proposition," Williams says.
He says the company has a dominant market share and consequently, one should not anticipate a private placement of the companies shares on the equities market but instead an initial public offer of its shares.
FUNDS TO BE RAISED
Advisers say the amount of funds to be raised will be determined over the next few months.
"Fund-raising does not include a private placement," he said. "Right now we are working with the company to strengthen the balance sheet and that does not require an equity private placement. Once we strengthen it - the company - it will look more attractive."
Just last month, it was announced that the company intended to list on the stock market in order to strengthen its balance sheet. The UGI Group's chief executive Neville Blythe was said to have been in discussions with NCB Capital Markets about the matter.
NET LOSS
The insurance company made a $140 million net loss last year due to underwriting losses it suffered in Cayman during the passage of Hurricane Ivan.
Board director, Donovan Lewis, had said that based on the level of funding required, there would have been no reason for the majority of the shares to be sold to the public.
The company had $443 million in shareholder equity up to December last year and retains its position as the largest general insurer in the island with a gross income of $3.1 billion.
