By Dipo Olowookere
Another insurance company listed on the Nigerian Stock Exchange (NSE) is seeking approval to raise fresh capital from its existing shareholders so as to increase its capital base.
This year, the National Insurance Commission (NAICOM) gave operators 13 months to raise their capital base by at least 100 percent on or before June 30, 2020.
Life insurers were told to raise their minimum paid up capital from N2 billion to N8 billion; general underwriters from N3 billion to N10 billion; while composite and reinsurance companies have new minimum paid up share capital requirements of N18 billion and N20 billion, up from N5 billion and N10 billion respectively.
The regulator exempted takaful and micro insurance companies from the recapitalisation exercise.
Since this circular was sent to operators, they have been doing everything possible to source for fresh funds especially through rights issue.
A couple of insurers have been getting approvals of their shareholders to raise fresh capital and one of them was Wapic Insurance, whose investors in June 2019, authorised the board of directors to raise additional capital up to N6.5 billion so as to meet the new recapitalisation policy of the industry’s regulator.
On Friday, September 20, 2019, the Head of Listings Regulation Department at the NSE, Mr Godstime Iwenekhai, disclosed in a circular that the insurance firm has applied to carry out rights issue worth N5.933 billion.
It was stated that the company, through its stockbrokers, Coronation Securities Limited, filed the application for the regulatory approval for the exercise, which has a qualification date of Thursday, September 19, 2019.
According to the notice, the firm is selling the shares to its shareholders at the price of 38 kobo each on the basis of seven new equities for every six previously held. Business Post reports that the amount is one kobo higher than its closing price on Thursday, the qualification date.
“Dealing members are hereby notified that Wapic Insurance Plc has through its stockbroker, Coronation Securities Limited, submitted an application to the Nigerian Stock Exchange for the approval and listing of a rights issue of 15,613,194,623 ordinary shares of 50 kobo each at 38 kobo per share, on the basis of seven new ordinary shares for every six ordinary shares held.
“The qualification date for the rights issue was Thursday, September 19, 2019,” the notice stated.
Adedapo Adesanya