Linkage Assurance Plc has said its board of directors is considering a capital raise of N7.5bn.
This follows the recent increase in the minimum share capital of insurers by the National Insurance Commission.
NAICOM had in May issued a circular on the increase in 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.
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 businesses was reviewed from N10bn to N20bn.
NAICOM also barred regulated entities from borrowing money to meet the requirements. This leaves the firms with the options of merger and acquisition or capital raise by rights issue.
Linkage Assurance said in its notice of Extraordinary General Meeting on Monday that its board of directors was scheduled to consider the best way to raise the needed capital at the EGM.
The notice said the company would create 15 billion ordinary shares of 50 kobo each, which would rank pari passu with the existing ordinary shares.
It said clause six of the company’s memorandum of association and article six of its articles of association would be amended to reflect the new authorised share capital of N15bn.
The notice read in part, “The directors have been authorised to raise additional equity capital for the company either by way of special placement, public offer, rights issue or other methods or a combination of any of them, either locally or internationally upon terms they deem fit.
“They have also been authorised to appoint professional parties and advisers, seek approvals and comply with regulatory directives.”