By InvestAdvocate
Lagos (INVESTADVOCATE)-Spring Life Assurance Plc has put up 100 percent (100%) of its stake for outright sale by owners of the Company.
A Source name (withheld) who works at the Company confirmed this to www.investadvocateng.com recently in Lagos Nigeria.
“Spring Life Assurance is up for outright sale, the Company is to be sold 100 percent to a preferred bidder†the Source said.
According to the Source, this has been own since early 2010 to sale off the Company to new owners and a couple of bidders have come to bid for it. “There is one of these Companies AIM Insurance who is currently in talks with Spring Life†the Source said.
The Central Bank of Nigeria (CBN) had in 2010 directed Banks to divest from their subsidiaries; apart from Insurance Firms include Pension Funds Management, Brokerage Firms, Mortgage Banks and others or form a group holding structure.
Following the directive, Nigeria’s Central Bank and the National Insurance Commission (NAICOM), set up a committee to ensure the success of the exercise and engaged auditors to look into the accounts of Insurance Firms, with a view of creating an enabling environment to attract investors.
As earlier reported, NAICOM had on November 21 2010 in a Statement made available to the Press said it had suspended the operational licence of Spring Life Assurance Plc with effect from October 19.
The Statement affirmed that NAICOM was acting in accordance with Section 9 of the Insurance Act 2003, and that this became necessary following the inability of Spring Life Assurance to maintain the statutory minimum capital of N2.0 billon.
N2.0 billion is required as minimum Capital for underwriting Life Insurance and N3.0 billion for General Insurance businesses in Nigeria following the year 2006 recapitalisation of the Nigerian Insurance Industry by the Federal Government (FG) through NAICOM.
In September 14 2010, Sola Ayodele, former Group Managing Director/Chief Executive Officer (GM/CEO) of Spring Bank; now nationalised Enterprise Bank Limited (EBL) said the Bank had injected N700 million into Spring Life Assurance.
She said NAICOM had demanded that N1.2 billion be put into the Insurance Firm.
“NAICOM had demanded we put in N1.2 billion in Spring Life and we have funds coming in installments; which requires approval from the insurance regulators; because any funds that come in, the source of the funds must be traced†she said.
Ayodele further affirmed that NAICOM had given its approval for Spring Bank to inject money into the insurance firm in trances, “by December year 2010, the N1.2 billion will be complete; the N700 million put into the insurance company; amounts to about 75 percent of the N1.2 billion expected to be put into the company†the former GMD said.
She also noted that NAICOM at a time required all insurance companies to recapitalise. “Spring Life was one of our subsidiaries and when we assumed office, the insurance company was not doing well, but we resolved that no subsidiary of the Bank will go under†Ayodele affirmed.
Spring Life Assurance former (Guardian Express Assurance Limited) since the post-recapitalisation era is yet to find its feet as the Company has had Capital adequacy and Management problems.
Before this time, Adetayo Akintunde, former MD/CEO of Spring Life Assurance in an interview published in Proshare had said that the Capital base of Spring Life Assurance was slightly above N2.0 billion and the Bank offered for sale part of their interest and sold it off.
“They had a retainership of about 51 percent and as at then, the new ownership of the Company was well diluted; these include the Members of Staff and a few other investors.†she said.
However, as at the time of filling in this Report, www.investadvocateng.com could not confirm this from the Management of the Company.
