Two firms named as having shown interest are Zimnat Lion of Zimbabwe, formed by a merger between Zimbabwean insurers, Zimbabwe National Insurance and Lion, and Development Finance Company of Uganda (DFCU).
Sources in PWICO say other possibilities being courted are Kenya’s Insurance Company of East Africa (ICEA), and a South African firm being identified by Loita.
PWICO General Manager, Geoffrey Kiryabwire, declined to discuss the moves for a joint venture and external financing, but confirmed restructuring was being done.
“Loita is running the whole restructuring process and they have full say on it. We took them on early this year to organise a restructuring credit, but I can’t talk specifics until it is complete,” Kiryabwire said.
The Uganda Insurance Commission (UIC) revoked PWICO’s license along with seven other companies May this year, stopping it from taking on new business but allowing it to continue running policies, termed as run-offs.
Kiryabwire said his firm would apply for a license as soon as Loita gives word that the necessary conditions are met.
“If the capitalisation is sound, we already have a business vision for the next five years. So long as people don’t get excited about PWICO, the process will be complete. Even now, we have people ready and waiting for us to open,” Kiryabwire said.
The license revocation collided with talks PWICO was holding with ICEA over the possibility of a joint venture or buy-in.
Less than 30 staff members are now working at PWICO’s Nkrumah Road headquarters at the Pan World Centre, where it moved to from the Pioneer Building on Jinja Road after losing its license and sending most of its staff on unpaid leave.
PWICO sources say the sh3bn capital injection the firm is seeking, is meant to cover salary arrears, pension payments, outstanding claims, and other creditors (sh2billion); and also constitute working capital (sh1billion) for the firm’s new operations.
PWICO money owed includes a salary debt now at just over sh100m, which has pushed some former workers, including senior management, to legal action; sh500m owed to Civil Aviation Authority (CAA) in pensions.
Sources revealed that PWICO recently sold two company vehicles to settle a debt owed to its former auditors, Arno Matovu and Company.
PWICO settled one large pension claim recently in a pensions-for shares swap arrangement in which British American Tobacco (BAT) took over PWICO shares in Rwenzori House.
“PWICO was first quoted as problematic in 1997 when it changed auditors from Arno Matovu and Company, to PricewaterhouseCoopers, which found it wasn’t making the profits it thought it was,” a former employee said.
“1998 was even worse because of the public perception. Insurance is about confidence, but people were hearing bad things about the company, so they didn’t bring in policies because they didn’t fully trust PWICO to pay,” the ex-employee added.
PWICO’s reputation was dented in 1996 when the company failed to settle a sh33bn performance bond for the UEB contract with Chinese government owned SIETCO over the construction at Owen Falls Dam.
PWICO had led a syndicate of insurance companies with a sh33bn performance bond cover for the SIETCO/UEB contract.
Pan World Insurance Company, ten years in existance August this year, is termed as a composite insurance company, one of only three in Uganda handling ‘Life and Non-Life’ insurance.
The other two insurance companies are Jubilee Insurance and National Insurance Corporation(NIC).