The shareholders of NEM Insurance Plc have given approval to a proposed plan to increase the company’s issued share capital from N4.2 billion to N10 billion. This is part of the resolutions that were reached during the insurance firm’s 50th Annual General Meeting (AGM) which held recently.
The detail: According to a statement that was signed by the Company Secretary (Olajumoke Philip-Akede) and issued to the Nigerian Stock Exchange, NEM Insurance’s share capital will be increased with the creation and addition of 11.6 billion ordinary shares valued at N5.8 billion.
To this end, the company’s Memorandum of Association was amended to reflect the increase in issued share capital. A part of the statement by the company said:
“That the Directors be and are hereby authorized to increase the Company’s share capital from N4,200,000, 000 (Four Billion, Two Hundred Million Naira) to N10, 000,000,000 (Ten Billion Naira) by the creation and addition thereto of N5, 800,000,000 (Five Billion, Eight Hundred Million Naira) by the creation and addition thereto of 11,600,000,000 (Eleven Billion, Six Hundred Million) ordinary shares of 50 kobo (Fifty Kobo) each, such new shares to rank pari passu in all respects with the existing ordinary shares in the share capital of the Company and that the directors are hereby authorised to issue such quantities as they may consider sufficient to raise the company’s issued share capital.
“That clause 6 of the Memorandum of Association be and is hereby amended to reflect the new share capital of N10,000,000,000 (ten billion naira) divided into 20,000,000,000 (twenty billion) ordinary shares of 50 kobo (fifty kobo) each.”
The backstory: Recall that the plan to increase NEM Insurance’s issued share capital has long been in the works. The company’s Chairman, Dr Philip Ayebae, first hinted at this development in June 2019, as Nairametrics reported.
Many insurance firms have recently been increasing their share capital in a bid to meet the deadline set out by the National Insurance Commission (NAICOM) on recapitalisation. Last week, Nairametrics reported that shareholders of Regency Alliance Insurance Plc would be deliberating on how to increase the company’s share capital from N6 billion to N11 billion, when they meet on July 6th for the firm’s 26th AGM.
Earlier on, shareholders of Niger Insurance Plc gave their approval to a proposed plan by the company’s board to raise additional capital to the tune of N15 billion. You may read more about NAICOM’s recapitalisation requirement for insurance firms by clicking here.
Back to NEM Insurance for a moment; the firm’s latest earnings report for Q1 2020 showed that gross premium written stood at N7.9 billion compared to N6.8 billion in Q1 2020. The company also reported a profit after tax of about N1 billion in Q1 2020, compared to N849.5 million in Q1 2019.
Meanwhile, NEM Insurance Plc’s share price is currently trading at N2 on the Nigerian Stock Exchange. Year to date, the stock has declined by about -17%, down from the N2.42 share price with which it began 2020.