Prestige Assurance shops for N1.5bn with rights issue

Underwriting firm, Prestige Assurance plc, is shopping for N1.5 billion through floating of  rights issue to enable it strengthen operations and build capacity for big ticket risks.

The insurance company is issuing 3,009.978.524 ordinary shares of 50 kobo at 50 kobo per share on the basis of six new ordinary shares for every five ordinary shares held by existing shareholders as of September 22, 2014.

The issue, which opens December 15, 2014, and closes January 26, 2015, has Sterling Capital Markets Limited as lead issuing house, while Nigerian Stock Brokers Limited is the joint issuing house.

Speaking at the company’s completion board meeting held in Lagos, chairman of the company, Charles Samson Sankey, says the issue is a vital step by Prestige Assurance towards actualising its strategic initiatives, especially its business consolidation that will enhance the company’s risk underwriting capacity.

“The proceeds would be applied towards repayment of the balance of the loan provided by New India, investment in the company’s distribution channels, improvement of the company’s working capital, upgrade of IT infrastructure and enhancing its gilt edge investment portfolio,” according to the chairman.

Breaking down further, Sankey notes that the estimated net proceed N1.46 billion  in the following order: 30.12 percent equal to N441.745,100.43 will go into repayment of the balance of loan provided by New India; 25 per cent equal N365,586,799.06 will go into enhancement of working capital to improve liquidity and increase risk retention capability; 18 percent for deployment of electronic platforms, facilities and other IT infrastructure to all our branches nationwide for quick and reliable service delivery.

The remaining 12 percent will be channelled into investment in distribution channels for improved marketing of the company’s products, example creation of special markets for NAICOM’s compulsory insurance policies and Market Development and Restructuring Initiatives (MDRI).

Sankey, urging the shareholders to take their rights, says it will provide the company with required funds to execute projects that will enhance the company’s growth and profitability. “I encourage you to exercise your rights in full, to reaffirm your support for our company and as declaration of your continued confidence in the Company’s potentials,” he says.

Anand Prakash Mittal, managing director, says the company is positive about the future performance, assuring that any investment made in Prestige is a worthwhile one.

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