CIC Insurance Group has raised the valuation of a 200-acre parcel of land it owns in Kiambu County by Sh1 billion to Sh5.06 billion amid its delayed sale that has forced it to reschedule payment of a shareholder loan.
The insurer disclosed in its latest annual report that it booked a Sh1 billion fair value gain in the financial year ended December 2024, after an independent valuer increased the valuation from Sh4.06 billion.
The revaluation comes amid delays in finding buyers for the Kiambu land, which CIC has subdivided into four blocks of freehold titles and further split one of the blocks into quarter-acre units to speed up sales.
CIC began the process of selling the Kiambu land in November 2022 to use the proceeds to settle a Sh3.4 billion loan owed to the Co-operative Bank of Kenya, but the process has been delayed, forcing it to reschedule the loan.
Co-operative Bank of Kenya owns a 24.8 percent stake in CIC through Co-op Insurance Society Limited, which is the immediate parent company of the insurer with a 74.3 percent shareholding.
The Co-op loan fell due on September 30 last year, but CIC says it rescheduled the payment to October 15 of the same year and then to mid-November. This was further pushed forward by two months.
“As of 31 December 2024, the company received an extension from Co-operative Bank to reschedule the loan repayments by a further 60 days up to 15th January 2025. The extension periods were to allow the parties to agree on the new restructuring terms for the loan repayment,” says CIC in its annual report.
CIC tapped the loan using the Kiambu land as collateral. The borrowing was at a fixed interest rate of 12 percent with a tenure of five years and was due for repayment on October 15, 2024.
The loan was structured as a single draw-down with a bullet repayment of the principal sum at the end of the tenure and also attracted interest repayment on a tri-annual basis.
During the year under review, CIC made a principal repayment of Sh355 million.
