By Dipo Olowookere
The application filed by one of the main insurance companies in Nigeria, AIICO Insurance Plc, to list on the Nigerian Stock Exchange (NSE) the shares sold to special investors via private placement has been approved.
Private placement is the sale of a company’s stocks to private investors at a price agreed by parties involved in the transactions. These shares are not like those issued to the general public like it is done in an Initial Public Offering (IPO).
This exercise is done when an organisation needs funds to carry out its operations and has probably initially sourced for capital from existing shareholders of the firm via rights issue.
AIICO Insurance, which is looking to improve its capital base to meet the newest requirements of its industry’s regulator, the National Insurance Commission (NAICOM), plans to raise the sum of N5.28 billion through private placement.
Business Post recalled that an Extra-Ordinary General Meeting (EGM) in 2018, in Lagos, shareholders of the company approved the proposal brought forward by the board for the raising of additional capital of up to N5.28 billion through the issuance of up to 4.40 billion ordinary shares of N50 kobo each of the firm at the rate of N1.20 per share by way of a special/private placement.
This was in line with the resolution of the same shareholders on May 5, 2016, authorising the board of directors to raise additional capital of up to N25 billion for the growth of the organisation.
Information reliably gathered by Business Post showed that AIICO Insurance filed an application for listing of the shares to be issued via this process on the NSE trading platform through its stockbroker, Magnartis Finance & Investment Limited.
The stock market regulator, after looking into the request and was satisfied with the presentation, approved that the total of 4,400,000,000 ordinary shares of the insurer to be sold at N1.20 kobo each, would be admitted on its main board for trading.
It was learned that Stanbic IBTC Capital Limited is acting as both the issuing house and financial adviser to the transaction.
Business Post reports that when the market closed for the day last Friday, shares of AIICO Insurance were traded at 70 kobo per unit after losing 2 kobo or 2.78 percent in the day’s session.
