AIICO Insurance Plc has received shareholders’ approval to increase its authorized share capital from N10 billion to N18 billion as it is prepared to meet the new minimum capital requirement for the insurance industry.
Chairman of the company, Kundan Sainani, who spoke at the Extra-Ordinary General Meeting (“EGM”) in Lagos, explained that the shareholders demonstrated their support by voting in favour of the proposition.
Sainani explained that AIICO had received NAICOM’s No Objection to its recapitalisation plan which includes a combination of private placement, rights issue and bonus issue.
Managing Director, Babatunde Fajemirokun, said, “The private placement is at an advanced stage with a number of investors. Therefore, the shareholders also approved amendments to the Memorandum of Association to reflect the addition of new investors.
“These are exciting times for us as a business and we are confident that the recapitalization exercise will see the company emerge stronger, more resilient, with adequate capacity and competencies to continue to provide risk protection and value-adding services to all our customers and stakeholders.”
Meanwhile, Nairametrics had reported that AIICO Insurance Plc was planning to increase its share capital from N10 billion to N18 billion. The company made this disclosure in a notification announcing its EGM.
Should AIICO Insurance secured the shareholders’ approval at the EGM. The company’s share capital will increase by 80%.
In a statement that outlines the EGM’s agenda, the company made known that ,“the share capital will be raised by the creation of 16 billion ordinary shares of 50 kobo each, ranking pari passu in all respects with the existing ordinary shares of the Company, and the capital clause of the Memorandum and Articles of Association of the Company, will be altered accordingly.”
Nairametrics understands that AIICO Insurance’s decision to raise capital might have been reached in view of the recent increase in capital requirements by the National Insurance Commission (NAICOM).
Recall that not too long ago, NAICOM introduced the tier-based minimum solvency capital, a situation that was later cancelled after it was challenged in court.