The Board of Directors of Lasaco Assurance Plc has called for consideration of a proposal for special capital raising as insurers scurry to raise funds to meet the deadline for new minimum capital requirements.
Lasaco plans to raise about N11.1 billion in new equity funds through the issuance of 9.25 billion ordinary shares of 50 kobo each at N1.20 per share. The company will issue the shares through special or private placement, which implies that the shares may be offered to strategic investors.
Shareholders of the insurance company are scheduled to meet at its Annual General Meeting (AGM) in Lagos next month to approve special resolutions authorising the board to undertake the private or special placement.
Lasaco also plans to undertake reconstruction of its existing issued shares of 7.334 billion ordinary shares of 50 kobo each, on a ratio of one new share for every four ordinary shares previously held.
Shareholders are also expected to consider and approve that the company’s reconstructed ordinary shares totaling 1.83 billion be revalued in accordance with the ratio of reconstruction and be listed on the Nigerian Stock Exchange (NSE), subject to appropriate regulatory consents.
The meeting is also expected to authorise the board to transfer N2.749 billion representing the surplus nominal value of the reconstructed shares into the share reserve account and form part of the shareholders’ funds of the company.
The National Insurance Commission (NAICOM) had in May released new capital requirements for insurance businesses with a 13-month compliance period for operators to shore up their minimum capital base to the required level.
The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion. Insurance companies are required to comply fully with the new minimum capital base by June 30, 2020.
