NEM Insurance Seeks Shareholders’ Approval to Raise N2.6bn

By Modupe Gbadeyanka

The board of NEM Insurance Plc has said it plans to raise an additional capital aimed to improve operations of the company.

In a statement issued by the firm, it was disclosed that the amounted needed for now is about N2.640 billion, which would be raised through issuing of additional shares of the insurer.

NEM Insurance said it wants to issue new 1.056 billion ordinary shares of 50 kobo each at N2.50k per unit by a Special/Private Placement.

However, before this can be done, the board is seeking authorisation of shareholders of the company.

This approval would be sought at the Annual General Meeting (AGM) of the firm slated for Tuesday, June 25, 2019 at the Federal Palace Hotel, Lagos.

“That on the recommendation of the directors, the shareholders hereby authorise the directors to raise additional capital through the issuance of not more than 1,056,000,000 ordinary shares of 50 kobo each, at N2.50k per share by way of a Special/Private Placement.

“That the shares proposed to be issued pursuant to the above resolution and the rights attaching thereto shall rank at least pari passu with the ordinary shares held by the existing shareholders in the company.

“That the shareholders hereby waive their pre-emptive rights under Article 43 of the Company’s Articles so as to enable the Special/Private Placement to proceed.

“That for the purpose of giving effect to the above, the board be and is hereby authorized to agree, make and accept all such term(s), condition(s) and modification(s) as it may deem fit, including, condition(s) and modification(s) stipulated or required by any relevant authorities and to seek all requisite approvals from the appropriate authorities, appoint consultants and advisers, finalize and execute all agreements or documents and to do all acts, deeds and things in this connection and incidental as the board in its absolute discretion may deem necessary and expedient for the purpose of the Special/Private Placement without being required to seek any further consent or approval of the members or otherwise to the end and intent that they shall be deemed to have given approval thereto expressly by the authority of this resolution,” the board said in a notice.

It was further disclosed during the AGM, shareholders will also be asked to amend the company’s Articles of Association by including a new Article 52, which states that, “The company may give notice of its Annual General Meeting and other statutory notices, its balance sheet (including every document required by law to be annexed thereto for consideration at the company’s General Meetings) in hard print or electronic format to any person entitled to receive such notices, either by sending them by post to the person’s last known registered address or by electronic mail to his/her last known electronic address.”

They will further authorise the changing of Article 52 to 53 and will then contain the clause “The accidental omission to give notice of a meeting or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings at any meeting.”

Business Post reports that this amendment followed an issue the insurance company had with one of its shareholders last year.

In June 2018, the insurer held its AGM, but a number of shareholders including Eaton Acquisitions, Premium Green Limited, Starvest Limited, Three Sea Investment Limited and Oluwaseyilola A. Ojo notified the Nigerian Stock Exchange (NSE) of an infraction by NEM Insurance, claiming that the insurance company did not follow the laid down rules by notifying them of the planned AGM.

As a result, the aggrieved shareholders asked the regulators to invalidate the meeting as well as all the resolutions reached at the AGM, including the resolution to raise additional capital through a private placement at a price below the market price of NEM Insurance stock.

This request was granted by the Securities and Exchange Commission (SEC) and it directed the board of NEM Insurance to reconvene the 48th AGM, with proper notice given to shareholders in line with extant laws.

At the next month’s meeting, the board will present to shareholders the Annual Financial Statements of the company for the year ended December 31, 2017 and Reports of Directors, the Auditors Report thereon and Audit Committee’s Report.