Mutual Benefits Assurance Plc has advanced its recapitalization efforts in compliance with the regulatory requirement set for underwriting companies in the industry.
The insurer is embarking on a private placement to raise additional N4.8 billion, from its existing investors who have shown interest to increase its stake to enable the company to meet its new capital requirement.
At the Company’s ExtraOrdinary General Meeting held in Lagos, Mutual Benefits Board of directors secured the approval of its shareholders to raise N4.8 billion, by the sale of 8,888,888,889 (eight billion, eight hundred and eighty– eight million, eight hundred and eighty-eight thousand, eight hundred and-nine) ordinary shares of 50 kobo each at 54 kobo per share. This is subject to regulatory approvals.
Among the shareholders that have indicated interest to take up the private placements includes Charles Enterprises, Arubiewe Farms Ltd.
Akin Ogunbiyi, the chairman said given the impact of the Covid-19 pandemic on the world economies and the negative investors’ sentiments in the stock market, the company has decided to raise the additional capital required by way of a private placement of its shares to some existing substantial investors who have indicated their readiness to commit further investment into the company to meet the new minimum regulatory capital.
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Femi Asenuga, managing director/ceo, Mutual Benefits Assurance Plc explaining details of the recapitalisation plan, said the Company had planned to conclude every aspect of the exercise before the end of 2020, except for the Covid-19 pandemic.
According to him, plans were to use 2021 to focus on the business and increase shareholder value with payment of dividends.
He assured shareholders that the company was doing everything possible to reward shareholders for the support and patronage in 2021.
The National Insurance Commission (NAICOM) had on 3rd June 2020 extended insurance companies recapitalization deadline to 30th September 2021, with the first phase to end December 31, 2020.
The segmentation shows life companies operating currently with N2 will increase to N4 billion by 31st December 2020, as the first phase and to N8 billion by 30th September 2021; General business companies operating currently with N3 will increase to N5 billion by 31st December 2020, as the first phase and to N10 billion by 30th September 2021; Composite business companies operating currently with N5 will increase to N9 billion by 31st December 2020, as the first phase and to N18 billion by 30th September 2021; while Reinsurance companies operating currently with N10 billion will increase to N12 billion by 31st December 2020, as the first phase and to N20 billion by 30th September 2021.
