Shareholders of Sovereign Trust Insurance (STI) have given the board of directors permission to raise fresh capital. The shareholders authorized this during the 22nd Annual General Meeting (AGM) held recently.
Here are highlights of the resolutions passed at the AGM:
- Authorized share capital has been increased from N5.5 billion to N7.5 billion by the creation of 4.0 billion ordinary shares of 50 kobo.
- The directors have been authorized to raise fresh capital up to the maximum authorized share capital.
- Subject to the approval of relevant regulatory authorities, this will be executed, whether by way of special placement or public offer without a preferential allotment or rights issue or a combination of any of them, either locally or internationally.
- The Company’s Memorandum of Association should be amended to reflect the increased share capital.
- The directors are also authorized to allot additional shares in the event of over subscription, subject to regulatory approval.
Why the firm may be raising capital
Industry regulator NAICOM has instituted a risk based capitalization system. Companies will only be able to insure risks in proportion with their capital base. Wapic insurance and Royal Exchange Assurance recently signalled their intentions to raise fresh capital. Foreign investors have also beamed their spotlight on the industry. Ensure insurance was recently acquired by Allianz for $35 million. South African firm Liberty Mutual recently bought a 75% stake in Unic insurance. Prudential Life, a UK based firm last month bought a major stake in Zenith Life insurance.
Sovereign Trust Insurance commenced business on the 2nd of January, 1995 with an authorized share capital of N30 million and fully paid up share capital of N20 million following the acquisition of Grand Union Assurance Limited. The company became a Public Limited Company (PLC) on 7th April 2004 and was listed on the Nigerian Stock Exchange (NSE) on the 29th of November 2006. STI shares closed at 50kobo in today’s trading session, unchanged year to date.