Kayode my affirmation
Coronation Insurance Plc is set to delist from the Nigerian Stock Exchange Limited (NGX) even after its board of directors agreed to pay off the company’s minority shareholders.
At a court-ordered meeting held in Lagos, the company’s Chairman, Mr Mutiu Sunmono, said the proposal was an offer by the majority shareholders to acquire shares held by other shareholders, excluding those who had elected to remain as shareholders of Coronation Insurance Plc, with each shareholder receiving 65 kobo for each share transferred.
Starting with an initial offer of 65 kobo, despite the company’s stake being worth 50,000 per unit, shareholders at the meeting requested an upward revision of the offer price.
The application was approved by the company’s Board of Directors who raised the final offer to 78 kobo per share, representing a 20% increase from the initial offer of 65 kobo that was submitted and accepted by shareholders.
With this development, it is expected that Crown Insurance will liaise with the regulators, which include the Nigerian Stock Exchange (NGX), the Securities and Exchange Commission (SEC), the National Insurance Commission (NAICOM), and the court to confirm this decision and begin the process of delisting NGX to become a corporation. Limited.
Addressing more than 600 shareholders who voted at the meeting, Sunmono said the board made this decision in light of the expected recapitalization exercise in the insurance industry, noting that the insurance company will need to deploy significant capital, which is unlikely to happen. It is met by keeping profit alone
According to him, “The ability to raise capital through public equity markets was taken into consideration and was not preferred given the current market conditions. It is also unclear whether all shareholders would be willing and able to invest additional capital in the company.
He added, “A small number of shareholders participated in the company’s rights issue in 2020, as the subscription rate reached about 68%, of which 96% came from Coronation Capital (Mauritius) Limited and other related parties.” As such, any new capital increase will result in a significant dilution of the minority shareholders’ stake. It would also be wise for the company to save all profits generated, indicating that no large dividends will be paid in the short to medium term.
These reasons led to an extensive discussion on the optimal corporate structure for the company, taking into account its plans and capital requirements, he said, adding that based on these discussions, the company received an offer from Coronation Capital (Mauritius) Limited on behalf of itself and other major shareholders, who own Collectively 73.4 percent of the company’s capital, to acquire the shares of other shareholders.
He said that the major shareholders expect that this deal will enable them to implement the strategies necessary to strengthen the company.
He had previously said that shareholders may choose to continue to hold their shares directly in Coronation Insurance and in their own names, as they own at least 20 million shares of the company.