Recapitalisation: Consolidated Hallmark Demand N3.9bn Capital Rise
Consolidated Hallmark Insurance has revealed plans to raise its capital base from N6.1bn to N10bn in line with the National Insurance Commission directive on recapitalisation.
NAICOM recently increased the minimum paid-up share capital of all classes of insurers, insurance and reinsurance companies with the exception of Takaful operators and micro-insurance companies, doing business in Nigeria.
The minimum capital base of life insurance companies was reviewed from N2bn to N8bn while that of general insurance companies was reviewed from N3bn to N10bn.
The capital base of composite businesses was reviewed from N5bn to N10bn and that of reinsurance business was reviewed from N10bn to N20bn.
As such, Consolidated Hallmark, with a capital base of approximately N6.1bn, saw its minimum capital base requirement increase from N3bn to N10bn and is seeking an additional N3.9bn to meet the new capital threshold.
The company said it was, therefore, imperative that it shared its plans with shareholders and stakeholders to enlist their support to realise the new target.
In a statement made available to the Nigerian Stock Exchange on Thursday, Consolidated Hallmark said its first line of action would be to issue additional shares by way of a rights issue.
It said the rights issue would give existing shareholders the opportunity to increase their stake in the company and take benefit of a lower offer price than that of a public offer.
The statement read in part, “The company, in the recent past, made a number of positive strides, some of which are worth mentioning. The company recorded 19 per cent growth in its gross premium income in 2018 and a 30 per cent growth in income line from the retail segment of its portfolio as a result of the implementation of its retail expansion strategy.
“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 said other options available to the company to achieve the additional capital required were private placement, public offer or merger and acquisition.
It said the definite or concrete arrangements to implement any of the options viable to the company would be communicated in due course.
It added that the management and board were working tirelessly to meet up with the recapitalisation directive.