The Securities and Exchange Commission (SEC), has granted Wapic Insurance Plc, approval to extend the offer period for its rights issue till Friday, January.
The rights issue, which opened on November 20, 2019, was initially scheduled to close on December 31, 2019.
The insurance company yesterday confirmed that it had received approval of the SEC to extend the offer period.
Wapic Insurance is offering 15.61 billion ordinary shares of 50 kobo each to existing shareholders at 38 kobo per share.
The rights issue had been pre-allotted to shareholders on the register of the insurance company as at the close of business on Thursday September 19, 2019 on the basis of seven new ordinary shares of 50 kobo each for every six ordinary shares of 50 kobo each already held.
The insurance company will use the net proceeds to beef up its capital base ahead of regulatory deadline for new minimum capital requirements for insurance functions.
The National Insurance Commission (NAICOM) had in May 2019 released new capital requirements for insurance businesses with a 13-month compliance period for operators to shore up their minimum capital base to the required level.
The minimum paid-up share capital of a life insurance company was increased from N2 billion to N8 billion, non-life insurance from N3 billion to N10 billion, composite insurance from N5 billion to N18 billion while re-insurance companies were directed to raise their capital base from N10 billion to N20 billion.
Insurance companies are required to comply fully with the new minimum capital base by June 30, 2020.
In anticipation of increase in minimum capital requirements for insurers, shareholders of Wapic insurance had in 2017 given approval to the board of the company to raise up to N10 billion in new capital to bolster the insurance company’s capital base.
Chairman, Wapic Insurance Plc, Mr. Aigboje Aig-Imoukhuede, had explained that the company was being proactive with the new capital raising plan.
“The company is approaching its shareholders at this time to seek approval to raise additional capital as a proactive step towards getting the company ready and set for a much-anticipated regulatory increase in the minimum capital of insurance companies,” Aig-Imoukhuede said.
He noted that a similar regulatory capital increase was imposed on the banking industry during the consolidation era and only the banks that were proactive in raising the required capital emerged as winners.