By Modupe Gbadeyanka
An approval has been given to the board of Sovereign Trust Insurance Plc to carry out its proposed rights issue aimed at boosting the company’s operations.
The insurance firm is planning to raise the sum of N2.09 billion from its existing shareholders through a rights issue.
Some days ago, the company’s management wrote an application to the Nigerian Stock Exchange (NSE) seeking its nod for the exercise.
Over the weekend, Business Post confirmed that the management of the local stock exchange has given its approval to Sovereign Trust Insurance to raise the fresh capital.
The approval was given on Wednesday, January 23, 2019, with Dynamic Portfolio Limited being the stockbroker for the exercise and Cordros Capital Limited acting as the financial adviser to the transactions.
Details of the approval showed that Sovereign Trust Insurance is issuing rights issue of 4.170 billion ordinary shares of 50 kobo each at 50 kobo per share on the basis of one new ordinary share for every two ordinary shares held as at January 15, 2019.
Business Post reports further that recently, shareholders of Sovereign Trust Insurance approved a new capital raising plan on the back of the cancelled tier-based minimum solvency capital policy proposed by the National Insurance Commission (NAICOM).
The board was given the authority to create 5 billion new ordinary shares of 50 kobo each to increase its authorised share capital to N10 billion of 20 billion ordinary shares of 50 kobo each.
Shareholders also approved the proposal to raise additional equity capital for the company up to the maximum of the authorised share capital with additional mandate to the board to absorb excess money in the event of oversubscription of the initial offer.
