Insurers raise investors’ hope with rights issue scorecards
Determined to increase shareholders’ confidence in the insurance sector, and hope of better return on investments, the nation’s insurers are making inroads in securing various regulatory approvals.
The latest is from the Securities and Exchange Commission (SEC), which approved making public, particularly to the companies’ shareholders and other related parties, the result of offering.
Speaking with The Guardian, at the weekend, the Managing Director, Prestige Assurance Plc, Sarbeswar Sahoo, one of the companies which embarked on rights issue, has called on investors to take advantage of its on-going N6.82 billion rights issue to invest in the company, even as it encouraged existing shareholders to increase their right in the company by taking more shares.
The Chairman, Board of Directors, Dr. Adedoyin Salami, also made a similar call at the Prestige Assurance’s Investors Forum in Lagos yesterday.
He said the rights issue was in compliance with a new recapitalization and to increase minimum capital requirement for all insurance companies in Nigeria across the various categories as mandated by National Insurance Commission (NAICOM), through its circular of May 2019.
The Chairman said: “in line with the above, Prestige Assurance Plc, having a current admissible issue and paid-up capital of about N3.8 billion (as defined by NAICOM), embarked on a recapitalisation exercise to raise N6.8 billion via Rights Issue to meet up with the new industry requirement.
“The recapitalization directive of NAICOM ties with the strategic plans of the firm to continue its growth trend which it has maintained in the past. Our Gross Premium Written (GPW) grew by 152% between 2015 and 2019, which culminated in growth in the Premium Income and Net Income earned by the Company.”
Consolidated Hallmark Insurance (CHI) Plc at the weekend also affirmed that the company offered by way of Rights Issue 2,032,500,000 ordinary shares of 50 kobo each at 52 kobo per share.
He said the result of the offer, which closed on June 8, 2020 and has just been approved by the SEC, shows a 100 per cent subscription.
The success comes despite the prevailing tough economic environment occasioned by the COVID-19 pandemic is a demonstration of high confidence in the company by the shareholders.
Details of the basis of allotment as approved by the SEC shows that 99 shareholders, who were provisionally allotted 681,465,926 ordinary shares accepted their rights in full, and were fully allotted accordingly.
Additionally, out of those that accepted their rights in full, 68 shareholders applied for additional shares totalling 1,289,699,021 ordinary shares and were allotted 1,289,699,021 from the renounced rights, making the offer 100 per cent allotted.
Commenting on the development in the industry, the Group Managing Director/Chief Executive Officer, (CHI) Plc, Eddie Efekoha, said he was delighted by the good result despite the challenging period, as the offer was held during the look-down occasioned by the pandemic.
He said: “It is great to see investors’ confidence and trust, being exhibited in the full subscription of the rights offer, with several shareholders taking up their rights fully, and applying for additional units at a time when investors’ appetite had been dampened by the ravaging pandemic.”
He added that, “the rights issue is the first in the series of steps that will put the organisation on the track of achieving not just recapitalisation objectives, but also the growth strategy as a group.”
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