In a notice issued to the Nigerian Stock Exchange (NSE) last week Friday, Prestige Assurance stated that the reconstruction earlier scheduled to hold on 23– 27 March, 2018, had been shifted due to the inability of its registrar to update its shareholders register. A new date of 23May – 6 June, 2018 has been selected.
The company’s paid-up share capital of 5,370,434,281 shares will be reduced to 3,817,412,096 shares. The share capital being reduced (1,553,022,185 ordinary shares of 50 kobo each) will be used to offset the company’s retained losses.
Prestige Assurancein August 2017 obtained approval for the reconstruction exercise.
An earlier notice (which was pulled down by the NSE) merely showed Wednesday, 23 May as the qualification date for the share reconstruction without giving an inkling of when the reconstruction would take place.
The NSE, in its reply to Nairametrics, stated that the notice was pulled down because Prestige Assurance had not fulfilled an important part of the filing thus leaving the publication on could be it could be misleading.
Contrary to the company’s claims, there is no evidence whatsoever informing shareholders that the reconstruction was billed to take place on 23– 27 March, 2018.
Information from the NSE website shows that the only document sent to the NSE in March 2018 was Prestige’s FY 2017 results. The only document pertaining to the reconstruction was the initial notice sent in August 2017.
The company, by this action, may have created an undue advantage for some investors to take positions to benefit from short term capital gains.
In August 2017, when the company made an application to the NSE for the reconstruction, it had accumulated losses of N776 million.
For the 12 months ended December 2017, accumulated losses had dropped to N347 million. Results for the first quarter ended March 2018, show that this had since dropped to N108 million.
If the current performance were to be maintained for the remaining 3 quarters of the year, the company’s retained losses could be wiped clean.
Why then is the company still embarking on the share reconstruction exercise?
About Prestige Assurance Plc
The company is a non-life insurance business with over sixty years’ experience in Nigeria. Its core areas of business include motor, marine, bond, engineering, fire, aviation, oil and gas and general accident.
New India Mumbai Assurance Company and Leadway Assurance Plc are the majority shareholders in the firm.