Underwriters assure investors’ of readiness for recapitalisation

The ongoing recapitalisation exercise in the insurance sector may have hit “high gear” as operators are now enhancing their liquidity position with the sale of assets that are less requisite.

The move, aimed at closing the gaps in the required share capital in line with the new minimum threshold, is yielding positive results for some.

While earnings by the industry operators could serve as a means to shore up the capital, others are opting for capital raise at the market or planning mergers and acquisitions.

To meet the June 2020 recapitalisation deadline given by the National Insurance Commission (NAICOM) to all underwriting companies to upgrade their capital to the new threshold, Cornerstone Insurance Plc, said it is making up its required capital as directed by the commission.

Also, the Group Managing Director, LASACO Assurance Plc, Segun Balogun, has assured that the company will complete its recapitalisation process before the December 31, 2020, deadline.

Balogun, during a chat with The Guardian on the sidelines of a press conference in Lagos, highlighted the achievements of the company and future plans as it marked 40th anniversary.

“De­spite the fact that the NAICOM extended the deadline for the industry’s recapitalisation to December 2020, we are still working as if it is June 2020. By April 2020, we should be done with our recapitalisation plans,” he said.

While speaking on its recapitalisation strategy, he said the company would embark on share reconstruction, increase the number of units shares it had, and increase the authorised share capital from 10 billion units to 20 billion units.

“We got certification from CAC saying that our authorised share capital has been increased from 10 bil­lion units to 20 billion units, which means we have 18 billion units of shares to issue.

“We have engaged the top shareholders of the company that this is the plan and we will offer rights and private placements. As for where the money is going to come from, we have the assurances that the major current shareholders of LASACO are bringing money.

“But we also have contingency plans that are very clear and possible and we are also doing private placement,” he said.

He said that the company acquired a company during the last recapitalisation that happened in more than a decade ago, and it would also recapitalise in the current dispensation.

Balogun explained that the newly upgraded head office of the company had been well equipped to compare to any modern building anywhere in the world.

While noting that LASACO is a major underwriter of Lagos State, he said this only took a little percentage of the company’s business, because it did more businesses with other clients.

The group managing director said that the com­pany was operating in different parts of the country, but hoped to strengthen its operations in the eastern part of the country.

While speaking on the future, he said: “Insurance companies doing well worldwide are divesting, so we are going into hospitality business, real estate and digital world.”