The Consolidated Hallmark Insurance has revealed its laid down plans on how it will attain the new recapitalization directive NAICOM gave earlier.
In exercise of its statutory powers and regulatory functions, NAICOM had on May 20, announced an increase in the minimum capital for insurance companies in Nigeria.
The review is to take effect by June 30, 2020.
According to the announcement, the new minimum capital required for general business, which is where they operate, was increased from N3 billion to N10 billion.
In a disclosure signed by the Managing Director of Consolidated Hallmark Insurance, Eddie Efekoha, the company is said to presently have a capital base of approximately N6.1 billion based on its last audited financial report as at December 31, 2018.
It also announced the plans of the company to get the additional N3.9 billion in a short period so as to meet up with the new capital threshold of N10 billion.
The firm sought for the support of its stakeholders to realise the new target, adding that its first line of action will be to issue additional shares by way of a rights issue.
This, it said, will give existing shareholders the opportunity to increase their stakes in the company and enjoy the benefit of a lower offer price than that of a public offer.
The firm also said it has, in the recent past, made a number of positive strides.
“The company recorded a 19% growth in its gross premium income in 2018. “It achieved a 330% growth in its income line from the retail segment of its portfolio, a result of the implementation of its retail expansion strategy,” it said.
On the governance side, the firm achieved 87 per cent and 84 per cent full compliance with corporate governance principles of NAICOM and SEC respectively.
It said the company, also improved on its latest credit rating by Agusto & Co. from a Bbb- to a Bbb.
This, it said, reflects a stable outlook and the potential for growth.
It said the additional capital will not only enable CHI to meet the regulatory requirement, but it will also be deployed to specific initiatives that will help CHI accelerate its growth and consolidate its leadership position in the industry while delivering exceptional returns to you as a shareholder.
The disclosure listed other options available to the company to achieve the additional capital required, which includes private placement, public offer, and Merger and Acquisition.
It said it will communicate in due course the definite and concrete arrangements to implement any of the options viable to the company.
The insurance firm assured that the management and the board are working tirelessly to meet the recapitalisation directive.