Prestige Assurance Plc has announced plans for a new capital raise of N3.374 billion to enable it meet capitalization requirements of N10 billion set for companies in its category, despite that the industry exercise is currently on hold following a court order.
The underwriting company, which had successfully completed a rights issue in the course of the past year, is currently having about N6.62 billion capitalization.
Prestige is a composite insurer, meaning it operates life and general business, and so would require N10 billion paid-up share capital to meet the regulatory requirement of the National Insurance Commission (NAICOM), if the recapitalization exercise was called up again.
The Board of Directors, at the Company’s Annual General Meeting, held physically and virtually in Lagos in compliance with Covid-19 directives secured the approval of the shareholders to raise fresh funds.
The approval which was part of the special business at the meeting reads “That the directors be and are hereby authorized to raise additional capital of up to N3, 373, 719, 056 only, via the issuance of ordinary shares by way of private placements, public offer, rights issue, mergers and acquisition, or a combination of any of these options at a price, terms and conditions to be determined…”
Adedoyin Salami, chairman of the Company dowsing shareholders apprehension on mergers and acquisition option, stated that the directors have chosen to have all the recapitalisation options to ensure that the company is not caught in the web.
However, he assured the shareholders that any decision taken by the board will be in their best interest.
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Prestige Assurance also gave a dividend payout of 2.5kobo, representing N331.3 million for the 2020 financial year, which was appreciated by the shareholders.
According to the shareholders, any company that pays dividend in the Covid-19 year should be applauded.
Meanwhile, in the 2020 financial year under review, Prestige Assurance Plc recorded a gross premium income of N7.01 billion, against N6.13 billion in 2019, a 14.36 percent increase.
Profit for the year was N678.31 billion, a 57.08 percent increase from N431.83 billion in 2019, and these improved results according to Adedoyin Salami demonstrates both strength and potential of the company.
The underwriter also grew its total assets to N18.51 billion, from N13.18 billion in the previous year, while shareholders fund rose from N8.45 billion in 2019 to N12.41 billion.
According to the chairman of the Company, “Innovation and efficiency gains will be the key pillars around which we seek to raise our game in near future. We expect that 2021 will continue to the strides we made in our digital initiatives, as our technology platforms and products continue to contribute to our performance and competitiveness, he said.
