Six NGX companies list 14.44 billion new shares worth N37.19 billion

Sterling Financial Holdings Plc and five other companies listed on the Nigerian Exchange (NGX) a combined 14.44 billion additional shares valued at N37.19 billion at their respective offer or conversion prices, following a series of capital-raising and restructuring transactions.

The transactions published by the Nigerian Exchange (NGX) in the weekly report for the period ended Friday, September 4, highlight how companies are using private placements, Rights Issues and debt-to-equity conversion to strengthen capital and support growth, with insurers driving the bulk of the new equity supply.

Four recapitalized insurance firms (Coronation Insurance, Sovereign Trust Insurance, SUNU Assurances, and Regency Alliance Insurance), contributed 11.79 billion of the 14.44 billion new shares, representing 81.70% of the total additional shares.

These four insurers also accounted for N26.69 billion of the N37.19 billion aggregate value of the six new share listings, representing 71.78% of the total value, while Sterling Financial Holdings and Eunisell Interlinked Plc, an industrial company, completed the number.

What the data is saying:

The six companies increased their issued share capital by 14,435,951,806 shares, with four insurers accounting for the bulk of the new equity.

• Coronation Insurance Plc listed 4,533,624,070 shares issued at N2.16 per share through a private placement, giving an issue value of about N9.79 billion.
• Sterling Financial Holdings Company Plc added 2,573,080,294 shares at N4.00 each through a private placement, representing approximately N10.29 billion.
• Sovereign Trust Insurance Plc listed 2,510,848,144 new shares at N2.00 each through a Rights Issue, valued at about N5.02 billion.
• SUNU Assurances Nigeria Plc added 2,075,285,714 shares at N4.50 each through its Rights Issue, with an issue value of N9.34 billion.
• Regency Alliance Insurance Plc listed another 2,674,385,062 shares at N0.95 each through a Rights Issue, representing approximately N2.54 billion.
• Meanwhile, Eunisell Interlinked Plc listed 68,728,522 shares arising from the conversion of N200 million debt into equity at N2.91 per share.

The four insurance companies collectively accounted for 11.79 billion new shares, reflecting the significant impact of the industry’s recapitalisation exercise on the listed equities market.

Get up to speed

As Nairametrics previously reported, the N37.19 billion share value reflects different capital-raising routes, with insurance recapitalisation accounting for the largest portion ostensibly to strengthen balance sheets and meet new regulatory capital requirements in line with NIIRA, 2025.

Coronation Insurance raised about N9.79 billion through a private placement, priced at N2.16 per share, Sovereign Trust Insurance raised N5.02 billion through a Rights Issue of 2.51 billion shares at N2 each, giving existing shareholders priority to participate.

SUNU Assurances raised N9.34 billion through a Rights Issue, offering 2.075 billion shares at N4.50 each to existing shareholders while Regency Alliance Insurance used a multi-phased recapitalisation programme involving Rights Issue and private placement initiatives to strengthen its financial position and meet NAICOM’s capital requirements.

Sterling Financial Holdings adopted broader capital-raising plans, with shareholders approving authority to raise up to $400 million through debt, equity or hybrid instruments to support expansion.

Meanwhile, Eunisell Interlinked expanded its equity through the conversion of N200 million debt into shares, rather than a conventional cash equity offer.

What you should know

The N37.19 billion represents the value of the newly issued shares based on their respective offer or conversion prices, and should not be interpreted as the amount added to NGX market capitalisation.

• A company that issues new shares can see its market capitalisation rise, fall or remain broadly unchanged depending on how the market prices the enlarged share base.
• To determine the actual market-capitalisation impact, each company’s additional shares would need to be valued using the prevailing market prices following their listing, rather than the prices at which the shares were issued.
• The development nonetheless underscores the growing role of the NGX in supporting corporate recapitalisation, particularly among insurance companies responding to higher regulatory capital requirements.

The transactions expand the supply of listed shares available to investors, potentially improving the companies’ capital buffers while increasing their equity bases. However, the increase in the number of shares does not automatically translate into an equivalent increase in shareholder value or market capitalisation.