Underwriters raise investors’ hopes with rights issue

Determined to boost shareholders’ confidence in the insurance sector, Nigerian insurers are making inroads in securing regulatory approvals, especially from the Securities and Exchange Commission (SEC), for rights issues.

Speaking with The Guardian, at the weekend, the Head, Strategic Marketing and Communications, AllCO Insurance Plc, Segun Olalandu, said the underwriter had taken another step towards its recapitalisation journey with an N3.5 billion rights issue, which opened last Wednesday, and will run through to October 7.

Olalandu said about 4,357,770,954 ordinary shares of 50Kobo each at 80Kobo per share, are being offered on the basis of five new ordinary shares for every 13 ordinary shares held as at the close of business on Monday, June 15, 2020.

The shareholders now have the opportunity to increase their stakes and reposition themselves in a company with excellent prospects, with the Rights Circular now available for download on the firm’s website.

“A greater future beckons to all our stakeholders, including shareholders and customers, as this exercise will unlock greater potential for value creation both in the short and long terms. It will make the underwriter emerge stronger with capacity to underwrite more risks,” stated Babatunde Fajemirokun, the Managing Director and Chief Executive Officer of AIICO.

Similarly, Consolidated Hallmark Insurance (CHI) Plc, at the weekend also affirmed its offer by way of rights issue of 2,032,500,000 ordinary shares of 50kobo each at 52kobo per share. He said the result of the offer, which closed on June 8, and approved by the SEC, showed a 100 per cent subscription.

The success comes despite the prevailing tough economic environment occasioned by the COVID-19 pandemic, which is a demonstration of confidence in the company by the shareholders.

Details of the basis of allotment as approved by the SEC showed that 99 shareholders, who were provisionally allotted 681,465,926 ordinary shares, accepted their rights in full, and were fully allocated accordingly.

Commenting on the development, the Group Managing Director/Chief Executive Officer, (CHI) Plc, Eddie Efekoha, expressed delight over the results despite the challenging period, as the offer was held during the look-down occasioned by the pandemic.