Consolidated Hallmark to raise N3.9 billion Capital ahead of NAICOM’s Recapitalisation Deadline
Consolidated Hallmark Plc has disclosed its plan to raise its capital base from N6.1 billion to N10 billion ahead of the deadline given by the National Insurance Commission (NAICOM) for insurance firms to recapitalise.
It was gathered that the company, which has a capital base of approximately N6.1 billion, is sourcing for an additional 3.9 billion to meet up with the new capital requirement which has been increased from 3 billion to 10 billion naira.
In a bid to raise the required finance, the company is planning to issue additional share by way of a rights issue. It also plans to brief the company’s shareholders and stakeholders of its plans in a bid to get their support to realise the new target.
According to the insurance firm, the rights issue would give existing shareholders the opportunity to increase their stakes in the company and take the benefit of a lower offer price than that of a public offer.
The statement reads, “The company, in the recent past, made a number of positive strides, some of which are worth mentioning. The company recorded 19% growth in its gross premium income in 2018 and a 30% growth in income line from the retail segment of its portfolio as a result of the implementation of its retail expansion strategy.
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“The additional capital will not only enable the company to meet the regulatory requirement but it will also be deployed to specific initiatives that will help to accelerate its growth and consolidate its leadership position in the industry while delivering exceptional returns to shareholders.”
Consolidated Hallmark, however, hinted that other options available to the company to achieve the additional capital required were private placement, public offer or merger and acquisition.
Recall that NAICOM had recently announced an increment in the minimum paid-up share capital of insurance and reinsurance firms.
In the circular signed by NAICOM‘s Director of Policy, Pius Agboola, the Commission said the new minimum paid-up share capital requirements would become effective from the commencement date of the circular for new applications, while existing insurance and reinsurance companies shall be required to fully comply not later than June 30, 2020.
Samson Oyedeyi
