By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)-Insurer, Sovereign Trust Insurance Plc (STI) has proposed a N1.15 billion fresh capital via rights issue according to a notice from Cordros Capital.

Cordros said the notice is coming on the heels of a recent approval granted the company by its shareholders.

A summary of the offer shows that STI would be issuing 2,290,585,798 ordinary shares of 50 kobo each at N0.50 per share expecting to hit a gross issue proceed of N1.145 billion.

The notice affirms that provisional allotment would be on the basis of one (1) new ordinary share for every three (3) ordinary shares of 50 Kobo each held as at the close of business on Friday, 30 May, 2014.

According to the insurer, purpose of the rights issue is to provide the company with the required funds that will enhance its growth and profitability.

A breakdown of the use of proceeds of the rights shows that 50 percent would be used to fortify investment assets, 30 percent for the repayment of (Daewoo) bond and another 20 percent for the enhancement of working capital.

The proposed rights issue is still awaiting Nigeria’s Securities and Exchange Commission’s approval and if granted would commence January 12, 2015.