Dipo Olowookere
By Dipo Olowookere
Information reaching Business Post has it that some shareholders of Wapic Insurance Plc are undecided on the company’s rights issue, which commenced over a month ago.
The underwriter, in order to raise fresh funds, sought the approval of the Securities and Exchange Commission (SEC) to sell a total of 15,613,194,623 ordinary share of 50 kobo each at 38 kobo per unit to its existing shareholders as at the close of business of Thursday, September 19, 2019.
Wapic Insurance is offering the rights issue on the basis of seven new ordinary shares for every six ordinary shares from Wednesday, November 20, 2019 to Tuesday, December 31, 2019.
But the privileged info at our disposal showed that the exercise has really not lived up to expectations because of the offer price and the price movement of the stock at the Nigerian Stock Exchange (NSE).
Since the rights issue started, the share price of Wapic Insurance only hit 38 kobo per unit for just three days; from November 27 to 29, 2019 before going down to 36 kobo per share on December 2 and then to 39 kobo per share on December 3 and 4, crashing to 36 kobo thereafter.
Business Post gathered that the share price even crashed to 33 kobo per unit at some points this month before getting back to life at 36 kobo as at the close of business on Friday, December 27, 2019.
For some shareholders, the wavy movement of Wapic Insurance stock at the bourse gives them something to worry about. The reason is because they feel it doesn’t make any investment sense to buy higher during the rights issue when they can simply buy at the open market at a lower price.
However, for those who have subscribed to the exercise, according to what we gathered over the weekend, they have the strong believe that the company has a “very huge prospect” to grow and have its share price rising above 40 kobo in the near future.
A stockbroker, who claimed to have a credible information about the ongoing exercise, informed Business Post that in the past few days, there have been renewed interests in the rights issue from the company’s investors.
“In the past few days, we have received enquiries and requests from shareholders of Wapic Insurance concerning the exercise. We expect more to take their rights next Monday and mostly on Tuesday, when the rights issue is expected to close,” the stockbroker, who asked not to be named in print, informed Business Post at the weekend.
On the possibility of extending the exercise, the brokerage firm said, “We are not certain about this, but from what we are seeing, such may happen, but I must emphasise that this will solely be the decision of the company.”
“But if the company’s share price improves significantly next week, we expect more shareholders to partake in it,” the stockbroker added.
Wapic Insurance hopes to use proceeds from the rights issue for investment in its Wapic Life Assurance Limited for the latest capital requirement and Wapic Insurance (Ghana) Limited. The company operates two business lines; Wapic Life Assurance Limited in Nigeria and Wapic Insurance in Ghana.
