Four insurance companies are finalising arrangements to raise a combined NGN20bn ($55bn) from existing and new investors ahead of a regulatory deadline for them to raise their minimum capital.
The four insurance companies are: Prestige Assurance, Consolidated Hallmark Insurance, AIICO Insurance and Sunu Assurances Nigeria, reported The Nation.
Authorities at the Nigerian Stock Exchange indicated that they have approved the fundraising by Prestige Assurance and Consolidated Hallmark Insurance.
Prestige Assurance is seeking to carry out a rights issue of 13.47bn ordinary shares of NGN0.50 each at par value of NGN0.50 with a view to raising NGN6.74bn from existing shareholders.
The New India Assurance, the precursor and founder of Prestige Assurance, is expected to provide more than two-thirds or about NGN4.7bn of the additional new capital of NGN6.735bn. The Indian insurer holds a 69.50% stake in the Nigerian subsidiary while Leadway Assurance, an unlisted Nigerian insurance company, holds 11.47%.
Consolidated Hallmark Insurance has received approval to raise new capital through a rights issue of 2.03bn ordinary shares of NGN0.50 each at NGN0.52 per share. The insurer is expected to raise NGN1.056bn through the rights issue in what appears to be the first round of fundraising by the insurance company.
Shareholders of AIICO Insurance and Sunu Assurances Nigeria are scheduled to meet next month to consider and approve new rights issues.
Insurance companies have up to 31 December 2020 to meet new minimum capital requirements set by the insurance regulator last year. To date, most of the 50+ insurers in the country have yet to meet the requirement.