Underwriting firm, Law Union & Rock Insurance Plc is set to complete its recapitalization before December 2020, well ahead of regulatory deadline of December 31, 2021.
The underwriting firm first announced on the floor of the Nigerian Stock Exchange (NSE) on Friday 28 February 2020, that a Transaction Implementation Agreement (TIA) had been signed between itself and Verod Capital Management (“Verod”); with the intent of the latter to acquire Law Union & Rock 100 percent.
Verod is an Anglophone West Africa Private Equity firm focusing on investing equity and equity-linked capital in growth companies across various consumer-driven sectors in Nigeria, including in particular, the insurance industry.
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In a recent interview, Ademayowa Adeduro, managing director, said the company has reached 85 percent completion of its recapitalization process. He stated that the company has gone as far as securing approval of the National Insurance Commission (NAICOM), the Nigeria Stock Exchange (NSE), and the Federal Competition and Consumer Protection Council (FCCBC), allowing Verod Capital acquire 100 percent shareholding of the Company.
Verod has also placed the required funds to meet the statutory N10 billion paid up capital for General Insurance businesses.
The acquisition would be achieved through a Scheme of Arrangement, where all shares would be transferred to Verod Capital as regulated by SEC. Upon successful completion of the Scheme of Arrangement process, a Court Ordered Meeting or Company AGM will authorize the acquisition. This meeting is expected to take place in August 2020.
It is noteworthy to recall that the Company witnessed impressive growth in its 2019 financial accounts, posting a 254 percent increase in Profit after Tax, from N226.5 million in 2018 to N802.8 million, thereby picking up its capitalization journey on a strong note in 2020.
Ademayowa further added that “keeping in good faith with the Transaction Implementation Agreement (TIA) signed by Law Union & Rock Insurance Plc and Verod Capital Management Limited, the latter has made the mandatory 10 percent deposit required, which is in excess of N500 million. Based on these activities, the company is progressing and looking to close all recapitalization process before the end of the year, with a reassuring posture for our stakeholders and partners.”
Finally, he affirmed that “we are going to play big going forward. Our new investor has previously invested in UBA Metropolitan Life now called Tangerine Life and they have equally invested in ARM Life. Incidentally we have a partnership with ARM Life prior to the acquisition by Verod. Our Life business was sold to ARM Life during the 2007 recapitalization. However, we are now going to be associate companies under the same ownership structure. While it is not going to be a composite insurance company, we would have joint services since we have joint ownership and thus enjoy joint business exchange.”
