Shareholders of Niger Insurance Plc have given their approval to a proposed plan by the company’s board to raise additional capital to the tune of N15 billion. This comes as the June 2020 deadline which requires general and life insurance companies to increase their paid-up minimum share capital to N10 billion and N8 billion (respectively) draws closer.
The details: The approval to raise additional capital is one of the key decisions that were taken during the company’s 49th Annual General Meeting which held recently in Lagos.
A statement sent by the company to the Nigerian Stock Exchange noted that the company’s directors would, henceforth, raise the additional capital through all necessary means, including (but not limited to) rights issue.
“That the Directors of the company be and are hereby authorized to take all necessary steps to raise additional capital of up to N15,000,000,000 (Fifteen Billion Naira) whether by way of rights issue, private placement or to negotiate merger and acquisition or any other form of business combination or other arrangement or a combination of methods with insurance companies and that the rights issue be executed at such price, time and on such other terms and conditions as the directors may deem fit.”
The backstory: Insurance stakeholders in Nigeria were thrown into a pandemonium earlier this year when the National Insurance Commission (NAICOM) issued a circular mandating insurance firms to raise their minimum paid-up issued share capital to N10 billion for general insurers, and N8 billion for life insurers.
Ever since the announcement was made in March this year, many of the insurance companies have been scrambling to raise the needed capital in order to meet the deadline. Some of their plans include rights issues, mergers and acquisitions, and more. Nairametrics reported that NAICOM was reviewing these recapitalisation plans. Apparently, Niger Insurance’s plan was eventually approved by the regulatory body.
In the meantime, the directors of Niger Insurance Plc have been authorised to restructure the company’s share capital “either by way of share consolidation, division’ cancellation or re-denomination.”