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* Co-op Bank shares gain as much as 6.2 percent (Updates with listing plan)
NAIROBI, Oct 26 (Reuters) - Kenya's Co-operative Bank has raised its stake in Co-operative Insurance Company (CIC) to 21 percent from 2 percent, forging a partnership to push ahead with regional expansion.
Co-operative Bank Managing Director Gideon Muriuki told an investor briefing that the value of the transaction was between 120 million and 130 million shillings ($1.49 million and $1.61 million), on CIC's capital base of 600 million shillings.
"The bank has increased it's shareholding to 21 percent, thereby becoming the single largest shareholder of CIC," Muriuki said.
The move will also help CIC attain its ambition of going public in 2013 through an initial public offering after doubling its capital base to 1.2 billion shillings.
"We have quite a good ambition to expand our investment and to achieve that goal, we would need to raise enough capital," Nelson Kuria, CIC's managing director, told Reuters after the briefing.
Founded in 1978, Co-operative Insurance Company of Kenya is wholly owned by over 1,350 co-operative societies and about 2,500 individual co-operative members.
It has an asset base of 4.5 billion shillings with total income of 2.8 billion shillings in 2009.
The company has recorded "tremendous" growth over the last five years at an average annual rate of 20 percent, CIC Managing Director Nelson Kuria said.
CIC focuses on providing insurance services to co-operative societies. It also offers life policies and general insurance to individuals as well.
Co-operative Bank, fourth-largest in the country by assets, had 134 billion shillings in assets at the end of June.
At 0945 GMT its shares traded up 2.5 percent at 20.75 shillings after surging 6.2 percent to 21.50 shillings on the Nairobi Stock Exchange.
The bank said this year it was registering operations in southern Sudan in a 70:30 joint venture with the government there, and working on similar initiatives in Uganda and Tanzania.
CIC said it hoped to take advantage of Co-operative Bank's own regional expansion to increase its regional footprint.
"Our immediate target is southern Sudan," Kuria said. ($1=80.60 Kenyan Shilling) (Reporting by George Obulutsa and Kwasi Kpodo; Editing by Duncan Miriri and Michael Shields)