Wapic Insurance Plc has revealed its plans to raise N5.9bn through a rights issue.

This comes after the recent increase in the minimum share capital of insurers by the National Insurance Commission.

On May 20, NAICOM 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, which left firms with the options of merger and acquisition or capital raise by rights issue.

To meet the new N10bn capital requirement for general insurance firms, Wapic Insurance requires N3.31bn additional capital as its current capital base stands at N6.69bn.

However, the Nigerian Stock Exchange said in a notice on Friday that Wapic Insurance had through its stockbroker, Coronation Securities Limited, submitted an application for the approval and listing of a rights issue of 15,613,194,623 ordinary shares of 50 kobo each at 38 kobo per share.

It said the rights issue would be on the basis of seven new ordinary shares for every six ordinary shares held.