The National Insurance Corporation managing Director, Folayan BayoNational Insurance Corporation Limited (NIC) has announced that its rights issue will open on Nov. 22 and close Dec. 13 in a bid to raise Shs 8.4 billion to increase its capitalization.
This is the first rights issue since the Securities Central Depository (SCD) accounts electronic system was introduced on the Uganda Securities Exchange (USE). Over 323 million shares are up for grabs but shareholders with paper certificates have to go to SCD account agents to immobilse their shares in to the electronic system.
"The size of the rights issue is Shs 26 per share at a ratio of 4 new shares for 5 existing shares and the register closure is Nov. 15," Folayan Bayo, NIC managing Director said.
NIC is a provider of insurance and risk management services in Uganda. Industrial and General Insurance Company Ltd (IGI) a Nigerian firm and the public own 60 percent and 40 percent. Of the 40 percent two investors hold 22 percent stake and the rest are about 1,805 small shareholders. The company officials are urging such investors to participate by either buying or selling their rights.
Bayo said the company will use the funds raised to expand the business's investment portfolio and increase its retention capacity and thereby underwrite bigger risks. NIC also plans to enhance its real estate holdings in terms of renovating including its head office in Kampala.
Robert Baldwin, the CEO of crested Stocks and Securities , co lead advisor (with Standard Bank Ltd of Kenya), and lead sponsoring stock broker for the NIC rights issue said, "The additional new shares will participate in future dividends to be declared and paid from the year ending 31 December 2013."
In2008, The Vision Group (NVL) undertook a rights issue which increased the Company's ordinary shares to 76,500,000 shares of Ushs 19.66 each and a share capital of Ushs. 1,503,990,000. NIC is the second firm to undertake the same corporate action, 5 years after NVL.