AIICO Insurance Mulls N3.5bn Rights Issue
By Modupe Gbadeyanka
The board of AIICO Insurance Plc is considering raising at least the sum of N3.5 billion from the capital market through a rights issue later in the year.
However, to get this started, the board of directors has called for an Extraordinary General Meeting (EGM) to seek approval of shareholders of the company.
In a notice to the Nigerian Stock Exchange (NSE), the insurer said this EGM is expected to take place at the Shell Hall of MUSON Centre, Lagos, on Thursday, March 5, 2020 at 10am.
The key issue of the day is the consideration of the proposal.
It explained that the raising of the fresh capital became necessary to meet the new requirements of the National Insurance Commission (NAICOM) on the capital base of insurance companies in the country.
“The company seeks to raise additional capital in line with the new regulatory requirements,” AIICO Insurance explained.
“On May 20, 2019, NAICOM released circular number NAICOM/DPR/CIR/25/2019 to all insurance companies increasing the capital requirement for insurance providing composite insurance to N18 billion.
“By Article 44 of the Articles of Association of the company, the company in general meeting may direct that any new shares shall be offered to the existing members of the company in proportion as nearly as the circumstances admit to the number of existing shares held by them or that the same be offered to the holders of shares of any particular class or classes,” it added.
In the notice to the NSE, AIICO Insurance categorically stated that on the EGM day, it would request shareholders to pass the resolution that “subject to the approval of regulatory authorities and pursuant to Article 44 of the Articles of Association of the company, the directors of the company are hereby authorised to raise, by way of a rights issue, addition capital of up to N3.5 billion or any higher amount to be determined by the board of directors by way of issuance of ordinary shares to the existing shareholders of the company upon such terms and conditions as to size and pricing as the board of directors may deem fit.”
“That the additional shares to be issued by the company by way of a rights issue shall rank pari passu with the ordinary shares held by the existing shareholders of the company,” another resolution to be passed on that day said.