June 28, 2018
By InvestAdvocate
Lagos (INVESTADVOCATE)-Insurer, Mutual Benefit Assurance Plc said its set to raise N2.0 billion via a rights issue following an approval from the Securities and Exchange Commission (SEC) for its five years strategic plan.
The insurance giant said it will offer shares to existing shareholders by way of rights issue of 4,000,000,000 ordinary shares of 50 kobo each at 50 kobo per share on the basis of one new ordinary shares.
This is coming on the heels of the proposal of the board of directors’ to raise fresh funds at Annual General Meeting (AGM) held in Ibadan on June 27, 2018.
Acceptance List for the Rights Issue will open on Monday, 6, August 2018 and will close Friday 14, September 2018. “The Rights being offered are tradable on the floor of the Nigerian Stock Exchange (NSE) for the duration of the Issue,” the company said.
Mutual Benefits, a general business and life insurer, has an authorised share capital of N10 billion with a paid up capital of N4 billion. The company provides insurance coverage across several sectors including aviation, oil and gas, marine cargo and hull business and other non-life insurance underwriting, including motor, fire and special perils, goods-in-transit, engineering insurance, retail and micro insurance, amongst others.
Akin Ogunbiyi, chairman of the company said at the completion board meeting on Thursday that the proceeds of the offer will be used to fund the company’s recapitalisation and growth plan, provision of additional working capital and financing the expansion of IT facilities to support the it’s enlarged operations.
On plans for 2018, he said “We will consolidate on the modest achievements recorded in 2017 by commencing our IT transformation blueprint in 2018.”
According to Ogunbiyi, this will help to eliminate slack time in its processing and ultimately enable them to focus more on customer delights and satisfaction.
He affirmed that the strategic aspiration of Mutual Benefit is to become the number one insurance company in Nigeria in terms of growth and profitability.
Meanwhile, the company offered its shareholders a N160 million dividend for the period ended December 31, 2017 which translates to N0.02 kobo per share.
“Despite the tough business environment we have been able to bounce back to profitability and delight our shareholders. Dividend of N0.02kobo per share will be paid to our esteemed shareholders who have stood by us over the years,” he added.
The chairman assured that going forward dividend payment will be sustained, while urging shareholders to take up the right issue.
A review of the company’s 2017 audited year end released by the NSE shows that that topline growth was combined with prudent management of expenses, which resulted in a 224.9 percent growth in profit before tax to N1.34 billion in 2017 from a loss position of N1.1billion in 2016.
Also, group’s total assets grew by 12.1 percent from N51.5billion in 2016 to N57.7billion in 2017.
While, gross premium written also appreciated by 16 percent from N12.14 billion in 2016 to N14.03 billion, underwriting income also grew by 10 percent to N11.78 billion in 2017 compared to the 2016 figure of N10.70 billion.
Net claims paid by the group in 2017 stood at N5.15 billion from N3.35 billion in 2016, resulting in a 54 percent increase from the previous year.
