The approval to proceed with a rights issue is the only item on the agenda when shareholders of AIICO Insurance Plc meet in Lagos on Thursday, March 5, 2020.
The company is planning to raise, by way of rights issue, an additional capital of up to N3. 5 billion or any higher amount that the Board of Directors may consider adequate to ensure sufficient capitalization.
The exercise is dependent on the receipt of approval from the regulatory authorities, namely the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE) and the National Insurance Commission (NAICOM).
A dispatch by Donald Kanu, Company Secretary and Legal Adviser, stated that the extra-ordinary meeting (EGM) will hold at Shell Hall, MUSON Centre, Onikan, Lagos.
Upon approval by shareholders, the exercise will entail the issuance of ordinary shares to the existing shareholders on such terms and conditions as to size and pricing as the Board of Directors may seem fit.
The additional shares will rank pari passu with the ordinary shares held by existing shareholders.
The directors will also be authorized to take all necessary steps to give effect to the resolution.
It will be recalled that last year the company’s shareholders had given the board and management an unqualified approval to proceed with the arrangement to raise the underwriter’s authorized share capital from N10 billion to N18 billion.
The shareholders’ approval came at an Extra-Ordinary General Meeting (“EGM”) on Monday, October 14 in Lagos, during which they demonstrated their support by voting in favour of the capital increase.
A statement by Segun Olalandu, Head, Strategic Marketing & Communications, quoted the Chairman of the Board, Mr. Kundan Sainani, as saying at the EGM that AIICO had received NAICOM’s “No Objection” to its recapitalization plan. The company’s recapitalization plan includes a combination of private placement, rights issue and bonus issue.
The fund raising is in compliance with the directive of the industry regulator, the National Insurance Commission (NAICOM), for operators in the insurance industry to shore up their capital bases.
NAICOM had given the insurance industry June 30, 2020, as deadline for operating insurance firms to comply with its new minimum paid-up share capital. The revised minimum paid-up capital for life will increase from N2 billion to N8 billion, general business from N3 billion to N10 billion, composite business from N5 billion to N18 billion and reinsurance from N10 billion to N20 billion.
AIICO Insurance Plc is a composite business.
AIICO Insurance Plc., a leading composite insurer in Nigeria, commenced operations in 1963. AIICO provides life insurance, health insurance, general insurance, wealth management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.