Guinea Insurance has initiated a major strategic move. The Board of Directors is seeking shareholder approval to raise up to N15 billion in additional capital.
The company submitted a formal notice to the Nigerian Exchange Limited on Wednesday. This aggressive drive responds to the Nigerian Insurance Industry Reform Act 2025. This new law has significantly hiked financial thresholds for operators in the sector.
Meeting New Regulatory Benchmarks
Under the new regulations, the minimum capital base for non-life insurers has risen to N15 billion. Similarly, life insurance firms must now hold at least N10 billion. Meanwhile, reinsurance companies face a steep new threshold of N35 billion.
To ensure compliance, the Board has outlined a recapitalization plan. Shareholders will vote on this strategy at an Extraordinary General Meeting (EGM) in December.
Details of the Capital Raise
The meeting will focus on restructuring the company’s share capital. The Board has proposed several key resolutions:
- Increasing Share Capital: The Board proposes increasing the minimum issued share capital from N4 billion to N19 billion. This will comprise 38 billion ordinary shares.
- Authorization: Shareholders will vote to authorize the N15 billion equity raise. This will occur through Rights Issues and Private Placements.
- Share Issuance: Directors are seeking approval to issue up to 6.32 billion ordinary shares. These new shares will rank equally with existing shares.
Rights Issue and Private Placement
Directors are also seeking specific ratification. They plan to issue up to 5.29 billion ordinary shares via a Rights Issue.
Furthermore, the proposal includes a safety clause. If existing shareholders do not take up their shares, other investors can buy them through a Private Placement. This ensures the company achieves its target capital.
Positive Market Reaction
Investors reacted positively to the announcement. On Wednesday, Guinea Insurance stock recorded a 3.6 percent appreciation.
The stock closed at N1.15 per unit. Additionally, market data indicates that approximately 2.09 million units exchanged hands during the session.
READ ALSO: House Demands Urgent Rescue of Jonathan from Guinea-Bissau Coup
