VFD Group, alongside Eaton Acquisition Limited, Three Seas Investment and Premium Green Limited have exited NEM Insurance Plc. Sources familiar with the transaction disclosed this to Nairametrics.
A combined block of one billion, six hundred million (1,600,000,000) ordinary shares of the issued share capital of the company, representing about 30% of the latter’s capital, was sold to new shareholders.
Several of the firms involved were said to have built their holdings over the last few years, and thus exited at a profit. The move was also an amicable one.
Prior to this, Premium Green Limited, Starvest Limited, Three Sea Investment Limited, and Oluwaseyilola A. Ojohad petitioned the Nigerian Stock Exchange (NSE) and Securities and Exchange Commission (SEC).
They claimed that NEM Insurance had failed to notify them of the AGM in accordance with section 217 (1) of the Companies and Allied Matters Act (CAMA), SEC clause 24 and NSE rule 19.3, which prescribed at least 21 days notice to shareholders of an AGM to be held.
They also asked the Nigerian bourse to reverse the special resolution proposed and passed at the AGM to raise additional capital through a private placement
NEM Insurance was eventually fined N575,000 and removed from the NSE’s corporate governance index.
Reasons behind the move
Though NEM Insurance is yet to issue an official statement pertaining to the transaction, VFD reportedly exited the firm, in order to raise funds for new opportunities it is considering within the financial space.
Group Managing Director of the firm, Nonso Okpala had hinted at plans for a national bank located in the South Western part of Nigeria
We think that in the growth phase, it’s very safe to go for a regional banking license which goes for N10 billion as against a national banking license which requires N25 billion.
We think that the South West geo-political zone has a great deal of commercial opportunities and we can use that advantage to grow. We are definitely heading for an international bank status, but the objective is to start from a regional banking perspective.
NEM Insurance Plc closed at N1.91 in today’s session on the Nigerian Stock Exchange, down 9.91%.
Results for the half year ended September 30, 2018 show gross premium written increased from N11 billion in 2017 to N12 billion in 2018. Profit before tax dipped slightly from N2 billion in 2017 to N1.89 billion in 2018. The drop in profit before tax was however minute, moving from N1.69 billion in 2017 to N1.6 billion in 2018.
About VFD
VFD Group was incorporated with the Corporate Affairs Commission (CAC) on 7th July 2009 and commenced business operations effectively on the 1st of January 2011.
The company’s subsidiaries include VFD Microfinance Bank, Everdon Bureau De Change, Anchoria Asset Management, and Germaine Auto Centre.