In order to meet the new capital base directed by the insurance market regulator, National Insurance Commission (NAICOM), AIICO Insurance Plc, is planning to raise funds.
In a statement seen by Nairametrics, AIICO Insurance is to raise additional capital to meet the regulatory requirements of N18 billion capital base.
The company says it intends to raise N3.5 billion or more by way of a rights issue. The plan will be presented at the Extra-Ordinary General Meeting of AIICO Insurance on March 5, 2020. The fundraising is, however, still subject to the approval of regulatory authorities.
It had earlier been reported that the new capital structure for Life, Non-Life and Composite insurance companies, including reinsurance companies, were increased from N2 billion, N3 billion, N5 billion and N10 billion to N8 billion, N10 billion, N18 billion and N20 billion respectively.
In the statement published on the Nigerian Stock Exchange (NSE), AIICO Insurance stated that at the Extra-Ordinary General Meeting, a resolution will be passed on the proposal.
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It stated, “subject to the approval of regulatory authorities and pursuant to Article 44 of the Articles of Association of the Company, the directors of the Company are hereby authorised, by way of a rights issue, additional capital of up to N3.5 billion or any higher amount to be determined by the Board of Directors by way of issuance of ordinary shares to the existing shareholders of the Company upon such terms and conditions as to size and pricing as the Board of Directors may deem fit.”
It added that “the additional shares to be issued by the Company by way of a rights issue shall rank in pari passu with the ordinary shares held by the existing shareholders of the Company.”
AIICO Insurance has until December 31, 2020, to meet the new capital base after the insurance regulator postponed the June 2020 deadline.