AIICO Insurance Plc has received a total of N3.5 billion in new equity capital from the shareholders of the insurance company.
AIICO recently completed the capital raiser for the N3.5 billion with the listing of more shares of 4.358 billion ordinary shares of 50 kobo that resulted from the new issue on the Nigerian Stock Exchange (NSE).
With the new listing, the total issued and fully paid up shares of AIICO Insurance increased from 16.315 billion to 20.673 billion ordinary shares of 50 kobo each.
AIICO Insurance had offered 4.36 billion ordinary shares of 50 kobo each at 80 kobo per share. The rights issue was pre-allotted on the basis of five new ordinary shares of 50 kobo each for every 13 ordinary shares of 50 kobo each held by shareholders as at the close of business on Monday, June 15, 2020. Acceptance list for the N3.49 billion rights issue had opened on Wednesday, September 2, 2020.
The rights issue thus recorded 100 per cent subscription.
AIICO Insurance had earlier this year consummated a capital injection that saw new strategic investors acquiring 38.83 per cent equity stake in the company. The acquisitions were done through a private placement.
AIICO Insurance offered 4.4 billion ordinary shares of 50 kobo each at N1.20 per share to raise N5.28 billion. The additional shares issued under the private placement increased AIICO Insurance’s issued share capital from 6.93 billion ordinary shares of 50 kobo each to 11.33 billion ordinary shares of 50 kobo each.
Shareholders of AIICO Insurance had at the annual general meeting in 2016 authorised the board of directors to raise new capital to bolster the operations of the insurance company. The new equity fund will boost the capital base of AIICO Insurance as the Nigerian insurance industry seeks to meet new minimum capital base for various insurance functions.
Insurance companies are in a hot race to raise new equity capital to meet new minimum capital requirements for various insurance functions as directed by the National Insurance Commission (NAICOM). NAICOM had in May 2019 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, The Nation reports.