Consolidated Hallmark Plc has disclosed its plan to raise its capital base from N6.1 billion to N10 billion ahead of the deadline given by the National Insurance Commission (NAICOM) for insurance firms to recapitalise.
The capital raise: While maintaining that its first line of action would be to issue additional share by way of a rights issue, Consolidated Hallmark made known that it is important it shares its plans with shareholders and stakeholders to get their support to realise the new target.
According to the insurance firm, the rights issue would give existing shareholders the opportunity to increase their stakes in the company and take the benefit of a lower offer price than that of a public offer.
News continues after this ad
The statement reads, “The company, in the recent past, made a number of positive strides, some of which are worth mentioning. The company recorded 19% growth in its gross premium income in 2018 and a 30% growth in income line from the retail segment of its portfolio as a result of the implementation of its retail expansion strategy.
“The additional capital will not only enable the company to meet the regulatory requirement but it will also be deployed to specific initiatives that will help to accelerate its growth and consolidate its leadership position in the industry while delivering exceptional returns to shareholders.”
Consolidated Hallmark,however, hinted that other options available to the company to achieve the additional capital required were private placement, public offer or merger and acquisition.
In the circular signed by NAICOM‘s Director of Policy, Pius Agboola, the Commission said the new minimum paid-up share capital requirements would 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 June 30, 2020.