The Board of Directors of LASACO Assurance Plc is seeking the approval of shareholders to raise additional capital by issuing of 40 billion ordinary shares of 50 kobo each by way of public offering, private placement or prefer shares.
Although the offer price was not stated, the directors want to get the approval at an extra-ordinary general meeting (EGM) slated for October 10, 2018 in Lagos. The capital injection is apparently in response to the new capital mandate given to all insurance firms by the National Insurance Commission (NAICOM).
NAICOM in July announced a tier-based the risk capitalisation requirements for life, non-life and composite insurance firms have had their capital base divided. Each of the category has three tiers.
Life insurance firms now have three capitalisation tiers. Tier one companies will be required to have N6 billion as capital. Tier two life insurance firms will be required to have N3 billion, while tier 3 firms will maintain the current requirements of N2 billion.
Tier one of non-life firms are to have a capital base of N9 billion. Tier two N4.5 billion, while tier 3 firms will maintain the current capital base of N3 billion. For tier 1 composite insurance firms, they will need capital base of N15 billion. Tier two firms N7.5 billion, while tier 3 is N5 billion.
LASACO Assurance is a composite firm and the directors did not state the price to be used for proposed 40 billion shares offer. However, if the company decides to issue the shares at its par value price of 50 kobo, it will realise about N20 billion. But if it decides to make the offer at its current market price, the amount to the raised would be lower. For instance, the stock closed at 32 kobo per share yesterday, meaning that should be shares be sold at that price, LASACO Assurance Plc will realise at N12.8 billion. As at the December 31, 2017, the firm’s shareholders’ funds stood at N8.156 billion.
The company ended 2017 with profit after tax of N661.878 million, down by 30 per cent from N944.461 million. It paid a dividend of four kobo per share.
Meanwhile, the bearish trend at the stock market continued in the new week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) fell 0.39 per cent to close at 32,327.59.
The depreciation recorded in the share prices of companies such as GTBank, UBA, Nestle Nigeria Plc, Nigerian Breweries and UAC of Nigeria were mainly responsible for the decline recorded by the index.