By InvestAdvocate

Lagos (INVESTADVOCATE)-Insurer, Sovereign Trust Insurance Plc on Friday it has received approval from the Securities and Exchange Commission (SEC) to extend its N1.145 billion rights issue to March 13, 2015.

The insurer in a notice to the Nigerian Stock Exchange (NSE) said the commission vide its letter SEC/SIS/EQT/STIP/2/15 dated 20 February 2015 approved the extension of the offer period of its rights issue for three (3) weeks from the initial closing date of 20 February 2015. “The Offer will now close on Friday 13 March 2015,” the notice affirmed.

The Offer circular made available to InvestAdvocate shows that the insurer on January 14 opened application and offered to existing shareholders 2,290,585,798 Ordinary Shares of 50 kobo each at N0.50 per Share.

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

Sovereign Trust said 50 percent of proceeds will be used to fortify investment assets, 30 percent for the repayment of Daewoo bond and 20 percent will be used to enhance the insurer’s working capital.

These represents in figure terms N555 million for enhancement of investment portfolio, repayment of Daewoo bond is N333 million and while working capital is 222 million; indicating a net  issue proceeds estimated at N1,109 billion after deducting the total cost of the Issue estimated at N36,076 million (representing 3.15 percent of the Issue).

Lead Issuing House to the fund raiser is FCMB Capital Market Ltd, while Joint Issuing House is Cordros Capital Ltd.