The shareholders of Regency Alliance Plc have suggested to the company not to pay them dividends for 2018 business year. According to the shareholders, this is in lieu of the pending recapitalisation process mandated by NAICOM.
Recall that the National Insurance Commission (NAICOM) had given a deadline for insurance companies to recapitalise or lose their licenses.
The shareholders made the suggestion after the company declared a N200.062 million dividend payout, representing 3k per 50k share for eligible shareholders.
The suggestion was made during the company’s 25th Annual General Meeting (AGM) in Lagos after the company’s Chairman, Amb Baba Gana Kingibe, announced the dividend payout as one of the agendas up for discussion.
The Backstory: NAICOM had recently announced an increment in the minimum paid-up share capital of insurance and reinsurance firms.
In the circular signed by NAICOM‘s Director of Policy, Pius Agboola, it disclosed that the new minimum paid-up share capital requirements will become effective from the commencement date of the circular for new applications, while existing insurance and reinsurance companies shall be required to fully comply not later than Tuesday, June 30, 2020.
The future of Insurance firms: Insurance companies in Nigeria are currently making concerted efforts to raise their capital bases. It is expected that there will be a flurry of right issues, public offers, and even IPOs following this development. Just like it happened in the banking sector during Soludo’s era, some insurance companies may even need to consider mergers and acquisitions in order to meet the capital requirements.
About the company: Regency Alliance Insurance Plc provides general insurance products to corporate and individual clients in Nigeria and Ghana. The company operates through Non-life/General Business, Properties & Investment, Retail and Microfinance Banking, and Vehicle Tracking Services segments.
Regency Alliance Plc opened trading at N0.20 on the Nigerian Stock Exchange (NSE).