Veritas Kapital Plans N5bn Through Preference Shares
UMORU ABDULKADIR
Poised to meet the minimum paid-up capital base requirements mandated by the National Insurance Commission (NAICOM, Veritas Kapital Assurance Plc has concluded plans to raise additional capital of N5 billion to increase its capital base from N7 billion to N12 billion.
This was disclosed by the Company’s Secretary, Saratu Garba, who stated that the authorised share capital of the company will be increased from N7, 000,000,000 (Seven Billion Naira) to N12 (Twelve billion Naira) through the creation of 10 billion units of preference shares of N0.50K each.
According to Umar, “In pursuant to the special resolutions (1-4) of the shareholders of veritas Kapital Assurance Plc authorising the board of directors to take all necessary steps including, initiating and negotiating mergers and/or acquisition or any other form of business combination or arrangement with any company/companies or institutions) whether foreign or local. For the purpose of increasing the Company’s capital, the directors have been authorised to raise additional capital through an offer of up to, 10 billion irredeemable, 7 Years Convertible. Cumulative Preference Shares”.
Meanwhile, NAICOM had earlier announced the increase of the minimum paid-up capital of insurance companies by over 200 percent to take effect immediately for new applications while existing insurance and reinsurance companies shall be required to fully comply with not later than June 30, 2020.
In the new capital base guidelines of NAICOM, “Life insurance companies are expected to have a minimum paid-up capital of N8 billion from its current minimum capital of N2 billion, General Insurance companies will now have to recapitalize to N10 billion from the present N3 billion, and Composite Insurance Companies will now have capital base of N18 billion to underwrite businesses as against the current N5 billion minimum capital”.
“The new capital base requirement also affects reinsurance companies who will now have to raise their minimum paid-up capital from N10 billion to N20 billion if they must remain in business”.
“The Clause 6 of the Company’s Memorandum of association be amended as follows: The Authorised Share Capital of the company is N12 billion divided into 14 trillion units of Ordinary Shares at N0.50K each and 10 billion units of Preference Shares at N0.50K each,” she said.
Kenneth Egbara, Managing Director, Veritas Kapital Assurance speaking at the general meeting in Abuja said that efforts are ongoing to ensure that the increased capital base increases within the required time. The instruments we are using is the convertible irredeemable preference shares which the shareholders are aware of and are happy about”.
“Raising fund in the capital market is a bit risky, and at this time where shareholders are not getting so many returns. We are almost certain that we can meet up”.
He said that Veritas is committed to securing the interest of the local shareholders before sourcing for a foreign investor to further deepen access to capital.
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