Dipo Olowookere
By Dipo Olowookere
As Firm Lists Addition Shares on NSE
The recent rise in the share price of AIICO Insurance Plc has caused some observers in the nation’s stock market to wonder what has been the main reason for this push.
Well, the reason for the recent positive momentum seen around the insurance stock is the new investment the company has attracted to position it as one of the forces to reckon with in the struggling sector.
From information scooped by Business Post, AIICO Insurance has got a new investor, who has acquired about 39 percent equity stake in the firm.
The new moneyback, LeapFrog III Nigeria Insurance Holdings Limited, came into the company through a private placement and from the document sighted by this newspaper, the new shares purchased by this firm have been admitted on the Nigerian Stock Exchange (NSE).
In a circular sent to stockbrokers in the market and signed by the Head of Listing Regulations Department of the NSE, Mr Head, Listings Regulation Department, LeapFrog bought 4.4 billion units of AIICO Insurance stocks at N1.20 each.
The circular dated February 19, 2020, said, “Dealing members are hereby notified that additional 4,400,000,000 ordinary shares of 50 kobo each of AIICO Insurance Plc were today, Wednesday, February 19, 2020, listed on the daily official list of the Nigerian Stock Exchange.
“The additional shares listed on the exchange arose from AIICO Insurance’s placement of 4,400,000,000 ordinary shares of 50 kobo each at N1.20 kobo per share to LeapFrog III Nigeria Insurance Holdings Limited.
“With this listing of the additional 4,400,000,000 ordinary shares, the total issued and fully paid up shares of AIICO Insurance Plc has now increased from 6,930,204,480 to 11,330,204,480 ordinary shares of 50 kobo each.”
With this deal, AIICO Insurance may likely go to sleep concerning the recapitalisation exercise put in place by the regulator, the National Insurance Commission (NAICOM), for operators in Nigeria.
NAICOM wants players in the sector to increase their capital base for better operations and they have been given till December 31, 2020 to meet up.
This has made many companies to seek extra funds through different sources, especially via rights issue, private placement or merger and acquisition.
In the new requirement, those in the life insurance business have been asked to have a minimum paid-up share capital of N8 billion instead of the present N2 billion, while the non-life insurance operators must have N10 billion versus N3 billion.
Also, the composite insurance guys have been asked to push their minimum capital from N5 billion to N18 billion, while re-insurance players have been asked to get N20 billion against the present N10 billion.
