Law Union and Rock Insurance to Delist from NSE

Delist Law Union

By Dipo Olowookere

Shares of Law Union and Rock Insurance Plc will soon no longer be available for trading on the floor of the Nigerian Stock Exchange (NSE), Business Post has confirmed.

This is because the company will be delisted from the exchange after plans to buy out the entire share capital of the company are concluded.

Last Thursday, shareholders of the insurer agreed to sell their stake in the organisation to the new owners, Verod Capital, at a unit price of N1.23.

At the Annual General Meeting (AGM) and the Court-Ordered Meeting (COM) held at the Muson Centre in Lagos, the shareholders said they are willing to collect the N1.23 per share being offered by the new investor.

Verod Capital has proposed to purchase the entire issued share capital of the firm in a Transaction Implementation Agreement (TIA) through its investment vehicle, Kanuri LUR Limited.

Under the deal, Law Union and Rock Insurance agrees to transfer a total of 4,296,330,500 ordinary shares of 50 kobo each of the company to Kanuri LUR or any other nominee of Kanuri LUR in consideration for a cash payment of N1.23 per share to the shareholders.

In view of this, all the shares in the company will become fully held by Kanuri LUR and its designated nominee.

It was gathered by Business Post that on the payment of the amount requested by shareholders, Law Union and Rock Insurance will be delisted from the main board of the NSE, while the registration of the ordinary shares of the company with the Securities and Exchange Commission (SEC) will be withdrawn and the firm will be re-registered as a private company limited by shares.

It was learned that this action was taken because of the new requirements of the National Insurance Commission (NAICOM) concerning the capital base of operators.

The insurance sector regulator in Nigeria has asked all insurance and reinsurance companies to increase their minimum paid-up capital and at the moment, that of Law Union and Rock Insurance is at N3 billion. But with this deal, it will rise to N10 billion, enabling it to remain in business.

According to Chairman of the firm, Mr Remi Babalola, this decision was taken to give better value to investments of shareholders in the company.

“Following negotiations with Kanuri LUR and further advice from its advisers, the board resolved to recommend the proposal to the shareholders for their kind consideration a meeting to be convened by an order of the Federal High Court.

“The board has further resolved to effect the proposal by way of a scheme of arrangement under Section 539 of the Companies and Allied Matters Act (CAMA) Chapter C20, laws of the federation of Nigeria 2004 as your board believes that same will serve the best interests of both the company and its shareholders,” Mr Babalola said at the COM, which took place after the AGM.

The Managing Director of Law Union and Rock Insurance, Mr Ademayowa Adeduro, said the board and management took the best decision in the interest of shareholders.

According to the proposed scheme consideration, the N1.23 per share offered by Verod is a 129 per cent of the last traded share price of the company on February 27, 2020, at 95 kobo per share, being the last business day prior to the date the execution of the TIA and announcement on the exchange, and a 208 per cent of the 60-traded day weighted average share price of 59 per share as at February 27, 2020.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

more recommended stories

%d bloggers like this: