Issues bonus, reconstructs shares for stakeholder benefits
BY KENNETH EZE
The management of AXA Mansard Insurance Plc says it has fully complied with the regulatory directive on minimum paid-up share capital issued by the National Insurance Commission.
In deft moves, the exercise which saw the company issue bonus shares to shareholders has also influenced their seeking and securing statutory approvals for share reconstruction.
The Chief Executive Officer, AXA Mansard, Kunle Ahmed, said, “We are grateful for the continuous support of our shareholders during this process.”
He assured investors that the fundamentals of the business remained strong, while the management was focused to deliver on its mandate.
“The fundamentals of the business remain extremely strong with an enviable financial capacity that supports our growth ambitions,” he added.
The Point reports that, the NAICOM in a directive dished out Q3 2020 reviewed the share-capital requirements of underwriting firms in the country upwards.
The policy required life insurers to raise minimum paid-up capital from N2 billion to N8 billion and general underwriters from N3 billion to N10 billion.
In the same vein, composite and reinsurance companies were instructed to raise minimum paid-up share capital requirements of N18 billion and N20 billion, up from N5 billion and N10 billion respectively.
The policy had seen several insurance companies using various capital raising instruments to comply.
The insurance company, secured requisite approval from its shareholders at its Extraordinary General Meeting of December 7, 2020, on which mandate it implemented phase one of the capital increase plan by executing a bonus issue in December 2020.
Consequently, the company’s share capital increased from N5.25 billion to N18.0 billion and consequently the number of shares outstanding increased from 10.5 billion to 36.0 billion.
This increased number of outstanding shares was expected to lead to increased share register management cost, impact per share metrics and possible wide-ranging implications on future capital raising exercise.
The Chief Financial Officer, AXA Mansard, Ngozi Ola-Israel, said “To manage the impact of the bonus share issuance, the company implemented the second phase of the 2020 approved scheme after receiving the final sets of regulatory approvals which is a capital reconstruction through par value re-domination.”
The impact of the exercise is an increase in the nominal value of shares from N0.50 to N2.00 per share, which consequently reduced the number of outstanding shares from 36 billion units to 9 billion units with the company retaining its existing shareholding structure.
The Point also reports that in keeping with the rules of the capital market in Nigeria, all shares continue to rank equally in all respects and continue to form a single class of ordinary issued shares of AXA Mansard.
“We strive to provide our shareholders with the best possible return on their investment while also ensuring that we fully optimise the number of shares in stock.
“The reconstruction done maintains the existing shareholding structure as well as the shareholder value of each of our esteemed shareholders,” the CFO added.
