Nem Insurance Plc (NSE – NEM) shareholders at the Extra Ordinary General Meeting (EGM) held on the 10th of December 2020, all the resolutions unanimously resolved bonus shares be issued to existing members of the Company, subject to the filing of the increase in Authorized Share Capital of the Company at the Corporate Affairs Commission as approved at the AGM held on 18th of June 2020.
The bonus shares will be distributed to shareholders whose names are registered in the Company’s Register of Members at the close of business on Wednesday, 16th of December, 2020 in the proportion of nine (9) new shares of 50 kobo each for every ten (10) existing shares of 50 kobo each, held by them.
The shares distributed shall rank pari pasu with the existing shares in all respect and will be treated for all purposes as capital and not as income.
This is according to a corporate action filed by the company to the Nigerian Stock Exchange and signed by Olajumoke Philip-Akede, Company Secretary/Legal Adviser.
Nem Insurance shareholders also approved that the sum of ₦272,551,000 (two hundred and seventy two million, five hundred and fifty one thousand naira) and ₦2,087,197,543 (two billion and eighty seven million, one hundred and ninety-seven thousand, five hundred and forty-three naira) be transferred from the Company’s Share Premium account and Retained Earnings account respectively to the Share Capital account.
The amount thus transferred shall represent the value of 4,719,497,087 (four billion, seven hundred and nineteen million, four hundred and ninety seven thousand and eighty seven) ordinary shares of fifty kobo (N0.50K) each as fully paid up, and distributed amongst members whose names are registered in the Company’s Register of Members at the close of business on Wednesday, 16th of December.
In a similar move to meet the National Insurance Commission (NAICOM) new capital requirements for insurance companies in Nigeria, AXA Mansard Insurance Plc, Shareholders approved a distribution of 17 bonus shares for every 7 ordinary shares held, during its EGM held on Monday, December 7, 2020.
At the close of trading on Thursday, the equity price of Nem Insurance Plc was down by N4.08% to N2.35 per share. YTD it is down by 2.89%.
The National Insurance Commission by a circular dated 20 May 2019, introduced new capital requirements for insurance companies in Nigeria, with a deadline of 30 June 2020.
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This was followed by another circular dated 30 December 2019, extending the deadline for the recapitalisation to 31 December 2020.
Following the incidence of the COVID-19 pandemic, NAICOM carried out another revision of the recapitalisation deadline, with a decision to segment and extend the recapitalisation process into two phases as follows: 1st Phase 1 – 50% of the Minimum capital for insurance companies must be met by 31 December 2020; and Phase 2 – all insurance companies to comply with the approved minimum paid-up capital not later than 30 September 2021.
In line with the NAICOM definition, the components of minimum paid-up capital, include
- Existing paid-up share capital;
- Cash payment for new shares;
- Retained earnings (capitalised);
- Payment in kind (e.g. properties, T-Bills, Shares, Bonds) for new shares issued, which must be converted to cash not later than three (3) months to the recapitalisation deadline; and
- Share premium (capitalised).
By: Ifunanya Ikueze