LASACO to Raise N11bn for Recapitalization, Others

By Modupe Gbadeyanka

Reports have it that in order to meet the deadline for new minimum capital requirements requested for by the National Insurance Commission (NAICOM), LASACO Assurance Plc will raise the sum of N11 billion from some strategic investors.

NAICOM had in May 2019 asked insurance companies in the country to increase their capital base on or before June 30, 2020 (within 13 months) if they wish to continue to remain in business.

For those in the life insurance segment, they were asked to raise their minimum paid-up share capital from N2 billion to N8 billion, while operators in the non-life insurance category were directed to jerk up their capital base to N10 billion from N3 billion.

Operators in the composite insurance sector were told to increase their capital from N5 billion to N18 billion, while those in the re-insurance arm were told to push theirs to N20 billion.

Since the circular was released to the insurance firms by the industry regulator, operators have commenced plans on ways to meet the deadline. In August, NAICOM asked the operators to submit details reports of how they intend to raise their capital base.

For LASACO Assurance, it intends to raise about N11 billion through new equity funds by issuing 9.25 billion ordinary shares of 50 kobo each at N1.20 per share. This would be done through special or private placement.

At its Annual General Meeting (AGM) fixed for Tuesday, October 8, 2019 at Oriental Hotel, Victoria Island, Lagos by 11am, the board would seek approval for special resolutions authorizing the private or special placement.

The investors would also be required to approve the proposed reconstruction of the company’s existing issued shares of 7.334 billion ordinary shares of 50 kobo each, on a ratio of one new share for every four ordinary shares previously held.

Shareholders are also expected to consider and approve that the company’s reconstructed ordinary shares totaling 1.83 billion be revalued in accordance with the ratio of reconstruction and be listed on the Nigerian Stock Exchange (NSE), subject to appropriate regulatory consents.

In addition, the investors would be asked to approve the transfer N2.749 billion representing the surplus nominal value of the reconstructed shares into the share reserve account and form part of the shareholders’ funds of the company.