National Insurance Company Limited - Malawi

completed

Summary Of Project Information (SPI)Project NameRepublic of Malawi - National Insurance Company Limited.RegionSub-Saharan AfricaSectorProject No009943Projected Board DateJanuary 5,2000Company NameNational Insurance Company Ltd. (NICO).Technical Partner and/or Major Shareholders The technical partner is Guardian National Insurance Company Limited of South Africa. Currently owning 25% of National Insurance Company Limited (NICO), Guardian, through its newly formed business partner in South Africa, Lion of Africa ( which is 50:50 owned by Guardian and Brimstone Investment Corporation), will increase its shareholding to 50%. Project Cost Including proposed IFC investment The total project cost is US$2.7 million. IFC is considering a US$1.2 million equity investment.Location of project and Description of site NICO is headquartered in Blantyre, Malawi.Description of Company and Purpose of Project National Insurance Company Limited (NICO) is Malawi''s largest insurance company, transacting both life and non life business in the country. It was established in 1971 and today controls about half of the market share. Over the years, the shareholding structure of the company has evolved and today, apart from its largest shareholders, Press (55%), MDC (5%) and Guardian National of South Africa (25%), NICO has also listed its shares on the Malawi Stock Exchange (13%). This landmark transaction is intended to privatize NICO, through the combination of a management buyout, strong technical partner participation and an IFC warehousing arrangement that will allow for a larger local ownership of NICO. The project fully supports the World Bank and IFC’s medium term strategy for Malawi and substantially strengthens the privatization efforts of the government of Malawi.NICO''s privatization will be a significant step in the creation of a strong local private segment in the financial sector. The increased involvement of Guardian is expected to provide the financial stability and technical know-how that will be essential to ensure the future success of NICO and one that will add depth to the financial sector in Malawi and provide new products in the insurance sector. IFC''s warehousing arrangement is intended to assist NICO''s management, which is predominantly local, to become a shareholder in the company. Malawi has almost no local private ownership of business as most of the large institutions are either government of foreign owned. NICO will be among the first private companies in the country with a significant local ownership.Environmental Category and Issues This is a category C project according to IFC’s environmental review procedure. No further environmental review is therefore required.      Date SPI sent to InfoShop December 6, 1999“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384