By Goddy Egene
Prestige Assurance Plc is shopping for N6.82 billion from existing shareholders through a rights issue. The move is part of efforts to meet the new minimum capital requirement stipulated by National Insurance Commission (NAICOM).
To this end, Prestige Assurance is offering 13.636 billion ordinary shares of 50 kobo each to shareholders at a par value of 50 kobo. The rights have been pre-allotted on the basis of 38 new ordinary shares for every 15 held as at January 31, 2020. The offer opened last Monday and expected to close on Tuesday, September 17, 2020.
Some market analysts said the rights issue would be a smooth sail for the company considering the calibre of its shareholders and its track record.
For instance, New India Assurance Company Limited, Mumbai, which is the precursor and founder of the company, holds 69.50 per cent majority equity stake. Also, Leadway Assurance Company, an unlisted Nigerian insurance company, holds 11.47 per cent equity stake, while the remaining shares are held by other individuals.
Shareholders of Prestige Assurance had created additional new 14 billion ordinary shares to create headroom for the new capital raising.
Shareholders of the company had increased its authorised share capital from N3 billion of six billion ordinary shares of 50 kobo each to N10 billion of 20 billion ordinary shares of 50 kobo each through the creation of more 14 billion ordinary shares of 50 kobo each for more headroom for the new capital raising.
The shareholders had authorised the Board of Directors of the company to raise “capital by way most suitable to the company in line with the recapitalisation requirement of the NAICOM.”
The commission had last in May 2019 issued new capital requirements for insurance businesses, directing operators to shore up their minimum capital base to the required level. The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.
Meanwhile, the stock market sustained its positive performance yesterday a following gains recorded by MTN Nigeria, Nigerian Breweries Plc and Stanbic IBTC Holdings Plc.
The gains pushed the Nigerian Stock Exchange (NSE) All-Share Index by 0.38 per cent to close at 25,236.97, while market capitalisation added N49.9 billion to be at N13.2 trillion.