The Board of Directors of Mutual Benefits Assurance Plc. has secured permission to raise the sum of N4.8 billion through private placement.
This is according to a disclosure signed by the company’s Secretary, Jide Ibitayo and seen by Nairametrics.
The disclosure is part of the resolutions reached at the Extra-Ordinary General Meeting of the firm and sent to the Nigerian Stock Exchange, dated December 3, 2020.
According to the information contained in the notification, the private placement worth N4.8 billion is to be raised through the sale of 8,888,888,889 ordinary shares of 50 kobo each of the company, at the rate of 54 kobo per share, in a distribution succinctly captured below:
- 5,331,004,445 units (approximately 60% of the total allotted units) is to be sold to Charles Enterprises LLC for about N2.88 billion.
- The remaining 3,557,844,444 (approximately 40% of the total allotted units) is to be sold to Arubiewe Farms Ltd for about N1.92 billion.
What this means
- According to Investopedia, a private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market. It is an alternative to an initial public offering (IPO) for a company seeking to raise capital for expansion.
- In this light, it is pertinent to note that private sales are now common for start-ups, as they allow the company to obtain the money they need to grow while delaying or foregoing an IPO.
What you should know
Other key resolutions reached at the Extra-Ordinary General Meeting include:
- Raising the company’s authorized share capital from N10 billion to N10.05 billion.
- To raise additional capital via the issue of debt or equity or a combination of both including convertible bonds, loans, stock, bonds with options etc.
- Amendment of clause 6 of the Memorandum and clause 5 of the Articles of Association of the company respectively.