AIICO Insurance Plc, a leading insurer in Nigeria has recorded a 126% subscription of its recently concluded rights issue, in what seems to be another giant leap forward in its recapitalization journey.
The disclosure is contained in a press statement, signed by the firm’s Head of strategic marketing and communications, Segun Olalandu and sent to Nairametrics.
READ: Niger Insurance Plc posts N311.43 million loss in Q2 2020
Nairametrics had earlier reported the launch of AIICO’s N3.5 billion rights issue, part of which, 4,357,770,954 ordinary shares of Fifty Kobo (N0.50) each at Eighty Kobo (N0.80) per share, was offered on the basis of five (5) new ordinary shares for every thirteen (13) ordinary shares held.
In lieu of this, the firm recorded about 126% subscription. Nairametrics also gathered that shares allotted will be credited immediately to the CSCS accounts of allottees by the Registrars to the issue.
READ: AIICO increases authorised share capital to N18 billion
What they are saying
The Managing Director & CEO, Mr. Babatunde Fajemirokun, said:
- “We were never in doubt about our Shareholders’ faith and commitment to our Company. They share our thoughts and vision for a much stronger and resilient Company, and are positioning themselves to take full advantage of the inherent opportunities.”
READ: International Breweries Plc raises N165 billion, Rights Issue fully subscribed
The Chief Financial Officer, Mr. Oladeji Oluwatola, also stated that:
- “The Company’s market leadership status and unwavering commitments to its various stakeholders have continued to endear investors to the brand.”
What this means
The oversubscription is an indication that the demand by existing shareholders for the firm’s stock outweighs the supply, indicating strong investors’ confidence in the firm’s potentials and the willingness by existing shareholders to be part of a promising future.
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In the view of the Chief Financial Officer of the firm, Mr Oladeji Oluwatola, some of the probable reasons for this strong investors’ confidence in the firm include; the company’s excellent market leadership status and unwavering commitments to its various stakeholders.
What you should know
- According to Investopedia, a rights issue is an invitation to existing shareholders to purchase additional new shares in a company. This type of issue gives existing shareholders securities called Rights. With the rights, the shareholder can purchase new shares at a discount to the market price on a stated future date.
- AIICO Insurance Plc was established in 1963 with a large Life and Non-life business, and complimentary focus on Asset Management, Health and Pension.
