By Dipo Olowookere
Chairman of Sovereign Trust Insurance (STI) Plc, Mr Oluseun Ajayi, has said the company would look into suggestions given by its financial adviser on different ways to raise fresh capital to meet up with the new capital base required from insurers operating in the country.
The National Insurance Commission (NAICOM) had recently informed operators that they would be required to increase their minimum capital base.
On Thursday, July 25, 2019, STI had its 24th Annual General Meeting (AGM) in Lagos and the board of the firm requested for the approval of shareholders present to increase the share capital to N15 billion from N10 billion.
The board had said it hopes to raise the share capital by creating 10 billion ordinary shares of 50 kobo each ranking pari passu in all respects with the existing ordinary shares of the company.
At this meeting, the shareholders authorised the board to go ahead with this plan, which the Chairman said should be completed in the third quarter of this year.
Mr Ajayi said apart from the rights issue, the insurance firm would consider other capital raising options as advised by their financial adviser so as to meet the new requirements of NAICOM.
According to him, “This is basically to ensure that our company is set on a very solid and competitive platform in the industry.”
“Our program for capitalization will take off with the issuance of rights to existing shareholders. According to the schedule, we will be issuing a total of 4,170,411,648 ordinary shares to our esteemed shareholders.
“This is expected to be finalized by the third quarter of 2019,” the Chairman, who appealed to shareholders to partake in the exercise, said at the AGM.
Mr Ajayi assured the shareholders that the firm would continue to “deploy several initiatives and strategies to address any industry challenges while harnessing the inherent opportunities,” noting that “changes in our business environment present uncommon opportunities for operators.”
Also at the meeting, the shareholders approved that in the case the exercise was oversubscribed, the board should capitalise the excess money and allot additional shares to the extent that can be accommodated by the company’s unissued share capital, subject to regulatory authorities’ approval.
