In a recent notice to the Nigerian Stock Exchange, Consolidated Hallmark Insurance (CHI) has announced its rights issue will open on Monday the 16th of October and closes on Wednesday the 22nd of November 2017. The company will be offering 1 billion shares at 50 kobo on the basis of 1 new share for every 6 held. Planet Capital Ltd is the issuing house for the offer.
The company’s shareholders, at the its yearly general meeting, had authorised the company, among other matters, to raise additional capital of up to N2.5 billion by way of issuance of shares subject to obtaining the relevant regulatory approvals,
Purpose of the rights issue
Chairman of the company, Obinna Ekezie at an event marking the signing of the offer, stated that proceeds from the rights issue would be used to acquire a life insurance company. The acquisition was to enable Consolidated Hallmark Insurance benefit from opportunities in the life insurance space. Several insurance firms in the country have embarked on capital raising exercises due to the risk based capitalization system out in place by the National Insurance Commission (NAICOM). Insurance firms can only underwrite risk commensurate with their capital base.
Consolidated Hallmark Insurance was incorporated on the 2nd of August 1991 as a private limited liability and began operations in 1992. It was converted to a public limited liability company in July 2005, and the name changed from Consolidated Risk Insurers to Consolidated Hallmark Insurance. The firm was listed on the NSE on the 22nd of February 1998.
Half year 2017 results for the company show Gross premium written fell from N3.4 billion in 2016 to N3.3 billion in 2017. Profit before tax also fell from N422 million in 2016 to N246 million in 2017. CHI shares closed at 50 kobo on Friday’s trading session, flat year to date.
